CAG Audit Reveals GST Refund Delays and Compliance Gaps in Gujarat, Risks Revenue Losses

• CAG identified inefficiencies in Gujarat’s GST administration, including refund delays and compliance gaps.
• Audit of 1,262 refund claims showed delays in 45% of acknowledgements and 15% of refund orders.
• Provisional refunds for zero-rated supplies faced delays.
• Irregular approvals under the inverted duty structure led to incorrect refunds.
• Excess refunds were due to input tax credit mismatches and lack of proper documentation.
• Absence of post-audit checks resulted in double payments and unauthorized refunds.
• Recommendations include stricter monitoring and enhanced compliance mechanisms.
• Compliance audit found deficiencies amounting to Rs 466.40 crore.
• Audit revealed major lapses in 38% of cases, including incorrect turnover declarations and ITC mismatches.
• Lack of granular taxpayer records posed a potential revenue risk.
• CAG flagged Rs 35.49 crore in non-compliance in transitional credit verification.
• Department failed to provide records for many cases, hindering assessment.
• Sample audit found non-compliance in 20.93% of cases, with issues in ITC carry-forward and credit claims.

Source: a2ztaxcorp.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---