Audit dept indicts PEC, says it paid irregular service tax

  • Bhartesh Singh Thakur, Hindustan Times, Chandigarh
  • Updated: Jun 04, 2015 09:54 IST

The Indian audit and accounts department has indicted the Punjab Engineering College (PEC) University of Technology, Chandigarh, for irregular payment of service tax worth Rs 86.46 lakh in its latest report.

According to the report, ministry of finance, vide a notification dated June 20, 2012, exempted certain services relating to service provided to or by education institutes with effect from July 1, 2012.

During the check of records for 2013-14, the audit found that two number of deposit works valuing Rs 19.10 crore was administratively approved and entrusted to the executing agency, chief engineer, Chandigarh administration.

While preparing the estimates of these works, the executing agency had included the element of service tax amounting to Rs 75.62 lakh in the estimates, which was further paid by the institute to the executing agency.

“As the institute is educational institute, service provided by the agency/contractors to the institute was exempted from the payment of service tax. The payment of service tax amounting to Rs 75.62 lakh was irregular,” says the audit report.

On being pointed out the discrepancies, director PEC stated that the engineering department will be requested to refund the payment of service tax.

Similarly, PEC had made an agreement with two service providers, M/s Kesar Security Services for deployment of Manpower and M/s Terrier Utility Services Private Limited, for providing security service in March, 2013, and May, 2011, respectively.

“The institution had paid service tax amounting to Rs 10.84 lakh to the service providers which was irregular. On being pointed out, no reply was furnished,” adds the report.


The audit says that the approval of the research proposals and grant released for the specific project sanctioned should be exclusively spent on the project within the stipulated time. The test check of records for 2013-14 revealed that the administrative approval for the implementation of three projects was conveyed by the different funding agencies and grant-in-aid amounting to Rs 75.34 lakh was released.

“The institute could not utilise these grants within stipulated time. These projects were still incomplete and delayed for 1.5 to 6 years. Due to this delay, the institute couldn’t avail/ provide intended benefit of these projects in time.

As such the expenditure amounting to Rs 51.95 lakh incurred on these projects remained unfruitful,” says the audit report.

On being pointed out this anomaly, the director stated that two projects have since been completed but one project related to CSE development of cloud-based frame work (project cost of Rs 55 lakh) is still in continuation.

“This project delayed for more than one year, efforts may be made to complete the project at the earliest,” adds the audit report.


During check of records upto March 31, 2014, it was found that five shops remained vacant as they were not put to auction resulting in loss of revenue of upto Rs 9.93 lakh. On being pointed out, the director PEC stated that efforts were being made for allotment of vacant shops.

During test check of records, it was found that 28 houses of category C and D were lying vacant from the period ranging between 8 to 71 months whereas the government employees were available in the institution for the respective categories of houses. The employees were paid house rent allowance of Rs 1.75 lakh.


It was found that pay and allowances of system manager and network administrator worth Rs 28.05 lakh was paid from April 2013 to March 2014.

The withdrawal of pay and allowances amounting to Rs 28.05 lakh against the unsanctioned posts was irregular, which is required to be regularized by the competent authority.

On being pointed out, the PEC said it had taken approval from the Board of Governors (BOG). “The reply is not tenable as the approval of Chandigarh Administration was required to be obtained,” says the audit report.

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