Tax refund: Pending amount of Rs 37K cr draws CAG attention

Despite a rise in the number of refund, decrease in pending refund amount by Rs 37,387 crore has drawn the Comptroller and Auditor General’s (CAG) attention. 

The national auditor in its report on service tax revenue says that in 2014, the number of pending refund claims increased to 8,154 compared with 7,906 in 2013. But interestingly, the amount pending in refund claims fell by Rs 37,387 crore during the same period. “It needs to be examined,” the report states. It also observed that measures initiated by the department to improve the recovery of arrears have not made an impact, which lead to its fall from 11.4 to 3.12 per cent in 2013 fiscal.

In context of adjudication, revenue implication of more than Rs 31,000 crore was pending till March 31, 2014. 

“The audit also revealed that 758 cases were pending for more than two years. More than 45 per cent of category ‘A’ service tax assesses, which were due for mandatory audit by the Central Excise and Service Tax department remained unaudited during FY 2014,” the national auditor claimed.

“The thematic audit paragraph on service tax on insurance sector having financial implication of Rs 352.55 crore was observed. Related to this, non-taxability of charges relating to services on account of ambiguity in carrying out the amendments in relevant provision resulted in non-payment of service tax of Rs 252.40 crore,” it reads.