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August 10, 2022

5 shocking observation by CAG in relation to GST Refund

by CA Shivam Jaiswal in GST

5 shocking observation by CAG in relation to GST Refund

1) GST refunds pertaining to the period from July 2017 to September 2019 (Pre-automation) received from 34 Commissionerates, CAG Audit noticed 410 instances of double payments owing to lack of reconciliation and monitoring amounting to ₹ 13.73 crore.

2) 552 cases out of sample of 12,283 refund cases processed, CAG noticed 522 cases where excess/inadmissible refund of ₹ 185 crore was sanctioned due to various reasons such as incorrect computation of Adjusted Total Turnover, ineligible accumualted ITC, claims time-barred etc.

3) CAG noticed significant number of refund cases where the Department did not adhere to the prescribed timelines for processing of refunds leading to instances of significant delay in issue of acknowledgement, deficiency memo and sanction of refund orders.

4) Even after four years of implementation of GST, a proper system of review and post-audit of refunds had not been effectively institutionalized so that the Department may rectify mistakes in time.

5) Further, in the majority of cases, the department did not pay interest to the taxpayers in case of delayed refunds.

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