GST full potential not achieved even after 2 years: CAG

New Delhi: In a major setback to the government-led by Prime Minister Narendra Modi, the Comptroller and Auditor General (CAG) of India has raised questions over the implementation of Goods & Services Tax (GST), which was launched in great pomp and gaiety show two years ago on July 1, 2017.

The national auditor in its report, which was tabled in the Parliament on Tuesday, stated that the full potential of GST roll out has not been achieved even after two years of its implementation as system validated input tax credit through "invoice matching" is not in place and non-intrusive e-tax system still remains elusive.

The CAG in its report also stated that the growth of indirect taxes slowed down to 5.80 per cent in 2017-18 compared to 21.33 per cent during 2016-17, with revenues from goods and services taking a 10 per cent dip. There was a short transfer of Rs 6,466 crore of GST compensation cess to the public account during 2017-18, the CAG report said.

The CAG in its report slammed government for continuation of GSTR-3B as it was introduced for just two months due to lack of preparedness of industry and GSPs. "This temporary return, initially introduced for two months, has been continued till date and GSTRs-2 and 3 have been kept in abeyance. As a result, the key mechanism of system verified ITC and invoice matching was not achieved," the report said.

In a recent written reply to the Parliament, Minister of State for Finance Anurag Thakur had told Parliament that the tax officials have unearthed Rs 45,682.83 crore worth of tax frauds under GST in the last two years of its implementation.

The government data showed that an amount worth Rs 6520.40 crore was detected in the April to June period of the fiscal year 2019-20. In the last two years, a total, 9,385 cases of GST frauds were reported in the last two years.