GST audit report by CAG

First Audit Report on GST Full Potential yet not achieved CAG Reports

Though its been 2 years of roll out of GST, but still there are lot many technical glitches which are required to be considered. Comptroller and Audit General of India (CAG) tabled its 1^st Audit report on GST in Parliament on Tuesday, 31^st July, 2019. Before the roll out of GST, there was a fear all around the corner regarding the smooth functioning of GST and as per the audit, its turned out to be true.

Lets have a quick look on the Report of CAG on GST :

1.) The major setback is return mechanism. It is not as smooth as it was expected to be, which resulted in roll back of invoice-matching.

2.) There are also frauds of input tax credit, because of invoice mis-matching.

3.) There is a dip of 10% in the Indirect tax revenues.

4.) A contravention of the provisions of the constitution of India has also been seen with respect to IGST, GOI resorted to devolution of IGST year-end balance to States as per Finance commission formula.

5.) There was also a short transfer of compensation cess.

6.) GSTR-3B being only a summary return, short filing of GSTR-1 implies that the tax departments did not have complete invoice levels.

7.) Delay in updating the Electronic cash ledger (ECL) even after successful payment of tax by the taxpayer.

Issues in reconciliation of GST receipt

a.) Facility of payment through Debit/Credit cards could not be made available as the Ministry did not decide on how to deal with the financial implications.

b.) No alert was issued when the threshold of turnover prescribed for composition Levy scheme was crossed.

Above mentioned are only few of the points. There are many other points which needs consideration. The One Nation, One Tax, was introduced to smoothen the earlier complex tax structure, but there are lot many technical glitches which needs to be improvised, otherwise this will also be treated as a complex tax structure.

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