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CAG raps govt for collection shortfall

The Comptroller and Auditor General has pulled up the Centre for higher cost of collection of excise duty and Rs 26.85 billion shortfall from the budgeted Rs 709.67 billion during 2000-01.

"Net receipts from central excise duty during 2000-01 were Rs 682.82 billion against the Budget estimates of Rs 709.67 billion indicating a shortfall of Rs 26.85 billion," the CAG said in its report tabled in Parliament on Friday.

The government also drew flak for Rs 60.30 billion shortfall in customs duty collections and another Rs 216.58 billion forgone for export promotion schemes in 2000-01.

"Net receipts of customs duties during 2000-01 amounted to Rs 475.42 billion, which fell short of Budget estimates by Rs 60.30 billion," CAG said.

The expenditure incurred for collection of excise duties also increased to Rs 6.16 billion in 2000-01 as against Rs 3.55 billion in 1996-97, it said.

"Growth in cost of collection averaged 15.32 per cent during the previous five years whereas revenue growth had averaged around 11.33 per cent," CAG said.

While the value of production in manufacturing sector increased by 3.32 times between 1990-2001, excise collections were up by only 2.78 times, it said, adding "the proportion of excise receipts in the value of production decreased from 8.94 per cent to 7.5 per cent."

CAG noted that rise in Modvat (modified value added tax) availed was higher by 6.92 times on account of liberalisation and expansion of scheme.

"To a certain degree, it is also indicative of misuse of Modvat and Cenvat (central value added taxes) credit facility," it added.

It was also critical on 50,464 cases involving Rs 229.09 billion of excise duty pending with different authorities till March 2001.

CAG also said service tax of Rs 21.85 billion was not levied on services provided by consulting engineers, transport operators, management consultants and consignment agents.

The customs collection fell short of Budget estimates by 4-24 per cent in all the previous four years. "These are indicative of weakness in budgetary forecasting," it said.

CAG asked government to expedite the completion of the Electronic Data Interchange system by deploying more staff, developing in-house expertise and ensure security and data validation.

"Even after nine years, the project is far from complete. No major gain in trade facilitation is visible since EDI connectivity has not been established and only a very small percentage of consignments are being cleared within the three days stipulated in citizen's charter," it said.

On non-realisation of forex, CAG said "exports proceeds aggregating Rs 117.35 billion were pending realisation as on June 2000. Of this Rs 75.49 billion or two-thirds was outstanding for more than two years."

Test checks revealed export incentives were availed in 5,262 cases involving Rs 21.83 billion unrealised forex.

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