Under-assessment, irregular claims of exemption and other shortcomings in the Delhi government’s tax collection system caused a loss of over Rs. 2,300 crore to the exchequer in 2011-12, the Comptroller and Auditor General (CAG) has said in its latest report tabled in the Delhi Assembly on Tuesday.
Lambasting the state government for the lacunae in the revenue collection system, it recommended transparency in tax collection to avoid such losses in the future.
The loss — Rs. 2310.14 crore — is equivalent to the allocation for the health sector in the Delhi government’s annual budget announced last month.
“Irregular claim of exemption/concessional rate of tax without furnishing proper statutory forms resulted in short payment of tax of Rs. 2310.14 crore, including interest of Rs. 404.30 crore,” states the CAG report.
Pointing out major loopholes in the tax collection system, the audit body said application of incorrect rate of tax resulted in short payment of Rs. 1.69 crore. It said that non-levy of appropriate taxes on the total earnings of six hotels on renting out banquet or conference halls caused a loss of Rs. 5.99 crore.
Short levy of stamp duty and registration fee on built-up area in car parking/stilt parking resulted in loss of Rs. 12.76 lakh in 2011-12.
“Irregular adjustment of tax credit on account of purchase of second-hand goods resulted in tax loss of Rs. 1.19 crore, including interest of Rs. 19.59 lakh and penalty of Rs. 49.56 lakh,” states the CAG.
The report mentioned that about 39% of the audited cable operators in the city failed to pay taxes in the past three years. Moreover, the state department of finance was unable to recover entertainment tax to the tune of Rs. 1.26 crore from 12 cinema hall owners and luxury tax amounting to Rs. 9.76 crore from hotel owners.
A total of 304 cable TV operators in three districts were checked. It was found that 123 (39%) operators did not pay tax during the last three years and 175 (58%) operators failed to pay tax amounting to Rs. 1 crore.
“The (tax) department failed to recover the interest worth Rs. 4.89 crore from DTH service providers on delayed tax deposit,” states the report.