In a first, service tax notice sent to watchdog CAG

The watchdog of all government receipts and expenditures — the Comptroller and Auditor General (CAG) has found itself at the wrong end of the tax laws. Debobrat Ghose reports.

The watchdog of all government receipts and expenditures — the Comptroller and Auditor General (CAG) has found itself at the wrong end of the tax laws.

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In a signed advisory circulated to all chief commissioners of central excise and service tax across India, the chief commissioner of Nagpur zone has mentioned the CAG is not discharging its service tax liability all over India against the services provided by them.

“Preliminary enquiry reveals that they (CAG) have received Rs. 3.3 crore (approx) from three organisations in last five years for providing services, but have failed to pay Rs. 33 lakh as service tax on such taxable services provided by them. The investigation is being finalised shortly for the issue of SCN,” the advisory said.

“We’ve come to know about such advisory, but as per rules, no service tax can be charged from CAG, because as a sovereign authority we don't fall under service sector,” a senior official in CAG told HT.

CAG charges fees by conducting audits of government departments and bodies, which in turn is deposited with the consolidated fund. “We don't keep fees with us,” the official said.

The letter has also said that it has been noticed that the commercial audit by the AG's office Nagpur has conducted only in a few cases in Nagpur and major activities are being undertaken in metro cities. The chief commissioner, Nagpur zone didn't respond to calls by HT.