Jammu & Kashmir revenue receipts rose by Rs 6,200 crore in 2016-17: CAG

Total revenue receipts of Jammu and Kashmir government for 2016-17 were Rs 41,980.72 crore as compared to Rs 35,780.60 crore in the previous year, marking an increase of Rs 6,200.12 crore, the Comptroller and Auditor General (CAG) of India said on Wednesday.

Out of this, 28 per cent of the total receipts were raised through tax revenue (Rs 7,819.13 crore) and non-tax revenue ( Rs 4,074.44 crore), and the balance 72 per cent were received from the Government of India as State's share of divisible Union taxes and duties (Rs 9,488.60 crore) and Grants-in-aid (Rs 20,598.55 crore), the CAG said in its report presented in Parliament.

The report on Revenue Sector and Public Sector Undertakings (Social, General and Economic Sectors) on Government of Jammu and Kashmir for the year ended 31 March 2017 revealed that the test check of the records of 61 units out of total 261 auditable units of Sales Tax/Value Added Tax, State Excise, Motor Vehicles and Law Departments conducted during the year 2016-17 showed under assessment/ short levy/ loss of revenue aggregating Rs 316.16 crore in 763 cases.

During the year, the departments concerned accepted under assessment and other deficiencies of Rs 5.88 crore involved in 104 cases which were pointed out in audit during 2016-17 and earlier years.

The Departments collected Rs 57.74 lakh in 25 cases pertaining to audit findings of previous years as well as of the year 2016-17, the report said.

On the performance Audit Levy, Assessment and Collection of Tax on Services, the report said since the service tax levied by the Union Government on taxable services does not extend to erstwhile Jammu Kashmir State, the then government had brought taxation of services under the ambit of Jammu and Kashmir General Sales Tax (GST) Act, 1962 with effect from March 1997.

"Non-fixation of targets for collection of tax from the services as goods under J&K GST Act, 1962 and failure to widen the tax base by way of increasing the revenues from notified services other than works contracts revealed that tax planning was not adequate," the report said.

It said the tax rate was enhanced from 10.50 per cent to 12.60 per cent from 1 April 2015.

The report said the 23 Drawing and Disbursing Officers (DDOs) deducted tax on payment made during the period 1 April 2015 to 31 March 2016 at the lower rate of 10.50 per cent which resulted in short deduction of tax of Rs 0.50 crore.

Tax at concessional rate of 4.2 per cent was to be deducted for centrally sponsored projects sanctioned/ allotted up to 31 March 2007. The applicable rate of tax is 10.5 per cent. Three DDOs had deducted tax at the lower rate of 4.2 per cent for contracts allotted after 31 March 2007 which resulted in a short deduction of tax of Rs 72.87 lakh, it said.

It said the TDS deducted shall be deposited in the treasury within 15 days but 12 DDOs deposited tax after a delay of 3 to 160 days for which they were liable to pay penalty of Rs 4.64 crore.

"The Act provides for a penalty of Rs 5,000 per contract if a copy of works contract is not submitted to the Assessing Authority. Copies of 4,292 works contracts executed during the period 2013-14 to 2015-16 were not received from 23 DDOs and the Assessing Authority had not imposed penalty of Rs 2.15 crore, the report said.

It said the concealment of purchases by 31 dealers resulted in non-levy of tax, interest and penalty of Rs 9.79 crore, while details with regard to deposit of Tax Deducted at Source (TDS) into Government account of 26 dealers were not recorded on the TDS certificates which meant that these TDS certificates were not amenable to verification and risk of non-deposit cannot be ruled out.

The Assessing Authorities had not imposed a penalty of Rs 46.44 lakh on 71 dealers for late filing of returns (266 returns) payable at the rate of two percent per month of the tax payable or Rs 1,000 per month, whichever is higher.

The Assessing Authority did not levy interest of Rs 33.36 lakh on delayed payment of tax by a dealer, the report said.

It said due to lack of monitoring of returns and recovery of the tax from a dealer, the Government had been put to a minimum revenue loss of Rs 1.21 crore.

The Assessing Authority did not ensure payment of tax by the main contractor which resulted in non-levy of tax demand of Rs 55.32 lakh, it said.

It said the details regarding the total number of persons responsible for deduction of tax that were required to apply for Tax Deduction Number (TDN) were not available with the Department.

Database/ records of quarterly returns of the TDN holders had not been maintained by the Department, the report added.