Government auditor CAG today pointed to various shortcomings related to Cenvat Credit Rules involving Rs 128.31 crore which went unnoticed by the department due to non-observance of compliance verification mechanism.
CAG had conducted performance audit on Cenvat credit scheme to seek an assurance that provisions as laid down are unambiguous and adequate to safeguard against any misuse of the Cenvat credit scheme and that the internal control and monitoring mechanism were in place and effective.
"We observed various shortcomings while examining adherence to the rules and regulations of Cenvat Credit Rules, 2004 involving Rs 128.31 crore which failed to come to the notice of the department due to non-observance of the compliance verification mechanism as envisaged," said the CAG report tabled in Parliament today.
Comptroller and Auditor General (CAG) also said that in violation of the existing instructions, 21 out of selected 41 Commissionerates had not conducted any detailed scrutiny of the returns. The reply from the remaining 20 Commissionerates was still awaited.
The Performance Audit was conducted in 41 selected Commissionerates which included examination of records relating to 469 assessees. The report covers the period from 2012-13 to 2014-15.
Cenvat credit rules enables manufacturers to avail credit of duty paid on the inputs and capital goods and utilise such credit for payment of duty on the final products manufactured by them.
The report recommended that government may consider inserting provision for charging interest in case of non/ delayed reversal of Cenvat credit in respect of non/delayed receipt of goods sent to job worker.
Further, the government may also consider inserting provision for furnishing detailed information regarding Cenvat credit availed by the assessee containing invoices/documents, name of goods with chapter heading, amount of credit taken, so that preliminary check may be exercised at range level.
In another report tabled in Parliament, the CAG made a case for development of a centralized database of internal debt, external debt and other liabilities, in addition to consistency in the reporting of public debt.
Public debt is total financial obligations incurred by the entire public sector of a nation, including guarantees and implicit debt. It include obligations evidenced by a legal instrument issued by the Central, State, Municipal, or Local Government.
