The Vigilance has found serious lapses in the functioning of the GST audit department in Ernakulam district, which has the highest GST revenue in Kerala. The finding that the audit system set up in the district like Ernakulam, which is making the biggest tax contribution to the state exchequer, is not working effectively to detect tax evasion and curb tax fraud.
The Vigilance inspection was conducted in Ernakulam, the district where the highest number of GST registrations and high-value trade transactions is taking place. During the inspection conducted at the Ernakulam Zonal Office, it was found that the files related to tax evasion cases were pending for a long time and there was an unusual delay in the proceedings.
The fact that the audit system itself, which plays a crucial role in the total GST revenue in the state, is considered to raise serious questions about the credibility of the tax administration. The report also pointed out that the failure to take timely action after the tax evasion was found has caused the government’s revenue loss.
Out of the 3,587 files selected for audit in 2024, only 1,558 files were able to complete audits till May 2026. The rest of the files are still pending. The main finding of the report is that due to the expiry of about 40 per cent of the tax evasion cases, the situation has not been able to take legal action.
Considering the scope and tax potential of trade transactions in Ernakulam district, there are also concerns that such lapses may have caused revenue loss of crores of rupees to the state. The failure to complete the files in time is an example of the lack of efficiency in the tax regime.
It is learnt that the government is preparing for a comprehensive restructuring in the GST audit department based on the vigilance report and the assessment of the finance department. Steps including speeding up audit proceedings, fixation of time limit for file disposal and ensuring responsibility of officers are under consideration.
Meanwhile, the Accountant General (A.S.) has examined the functioning of the State GST Audit Department for the first time. G.) The office has also been decided. The move is to examine the activities in other zones in the state in the wake of the lapses found in Ernakulam.
The vigilance finding that the audit system is not effective in Ernakulam, the largest tax revenue hub in the state, has taken a new turning point for discussions on the efficiency of government revenue protection systems.
Source: Kerala News
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