HYDERABAD: Several dealers made wrong VAT claims for input tax credit. According to the findings of the Comptroller and Auditor General (CAG) report on revenue, which was released on Thursday, the CAG examined some of the claims in Commercial Taxes Office Special Commodities and in one case, the dealer was issued ‘F’ form by dealers in Tamil Nadu state for consignment sales.
When cross-checked, the details of vehicles used for consignment sales on ‘F’ form with the websites of transport department, it was found that the vehicles were autorickshaws, educational institutions’ buses, motor cars, etc., some of which were even registered after the date of issue of ‘F’ declaration forms. Thus, exemption was claimed by the dealers by submitting false declaration forms. However, the assessment authority had exempted tax of Rs 6.39 lakh on the branch transfer/interstate sales turnover amounting to Rs 1.64 crore.
The dealers were, therefore, liable to pay penalty of 200 per cent. This resulted in non-levy of tax and penalty aggregating to Rs 6.39 lakh and Rs 14.99 lakh respectively.
In 24 offices, 28 dealers claimed excess input tax credit (ITC) of Rs 2.72 crore due to adoption of incorrect method of restriction of ITC. Non-restriction of ITC by the assessing authorities (AAs) as per the rules on exempt sale/transactions resulted in excess allowance of ITC.
Excess Input Tax Credit
In 14 offices, 23 dealers were allowed ITC of Rs 1.55 crore incorrectly on ineligible items. The incorrect allowance was due to non-restriction of ITC on damaged goods, invalid tax invoices and incorrect claim by hotels and bakeries.
In nine offices, the AAs incorrectly allowed ITC of Rs 1.63 crore on works contracts of 11 dealers. The incorrect allowance was due to allowing ITC to dealers who were not eligible and the AAs allowed 100 pc ITC though the dealers were eligible for only 90/75 pc.
Excess deferred Sales Tax benefit of Rs 3.02 crore was availed by 15 industrial units under the jurisdiction of six offices. Deficiency in monitoring by AAs resulted in excess availing of deferred sales tax.