The Comptroller and Auditor General (CAG) report on indirect taxes for the year ended March 31, 2002, has criticised the government for making unrealistic projections and then falling short of targets. The budget estimate for 2001-02 was pitched at an optimistic figure of Rs 81,720 crore but the actual collections fell short by 11.5 per cent.Absence of relevant records related to coverage of goods under maximum retail price (MRP) based valuation revealed that adhoc and staggered coverage of commodities resulted in a total loss of revenue of Rs 37.61 crore.Audit scrutiny also revealed several lapses in fixation of abatement. This includes non-consideration of sales tax exemptions availed by aerated water majors resulting in a loss of revenue to the tune of Rs 119.05 crore. In the case of perfumed hair oil and mineral water, the estimated loss on account of revenue is Rs 53.40 crore.The report has criticised the handling of appeal cases by the Central Excise Department. Duty of Rs 1,628.11 crore could not be realised in 4,297 cases due to failure on the part of the department to get the stay orders vacated through expeditious and effective action.Audit scrutiny has also revealed that under assessment of central excise duty has led to an under assessment amounting to a delay of Rs 1,212.87 crore.In the case of service tax, it was observed by the CAG that service tax of Rs 5.39 crore was not recovered from the recipients of the services of transport operators. Due to absence of provisions to enforce recovery of tax from foreign consultants revenue amounting to Rs 3.91 crore was lost. Further, service tax of Rs 10.74 crore was not levied on services of consulting, engineering and management consultants.
