Comptroller and Auditor General flags Rs 3,071-cr GST irregularities in Delhi

The Comptroller and Auditor General (CAG) tabled in the Delhi Assembly on Friday flagged serious irregularities in the Delhi Government’s administration of electricity subsidies, GST compliance, e-procurement and departmental financial management, pointing to revenue risks running into thousands of crores and avoidable expenditure across multiple departments.

In its report, the CAG said audit findings in the revenue sector alone involved an aggregate monetary value of Rs 1,985.04 crore, while audit observations in the economic, social and general sectors involved Rs 45.12 crore.

The audit found that Delhi’s total revenue receipts increased from Rs 43,113 crore in 2018-19 to Rs 62,703 crore in 2022-23, with tax revenue accounting for Rs 47,363 crore (75.53%), non-tax revenue Rs 581 crore (0.93%) and grants-in-aid from the Centre Rs 14,759 crore (23.54%) during 2022-23.

During local audits of 22 units, the CAG detected 145 cases involving non or short levy of taxes and fees worth Rs 220.59 crore, adding that the departments concerned did not furnish replies to these audit observations.

A major portion of the report focuses on the implementation of the Goods and Services Tax (GST) e-way bill system. The audit found that five taxpayers generated 759 e-way bills involving outward supplies worth Rs 33.89 crore but discharged no tax liability of Rs 4.68 crore after filing nil GSTR-3B returns. It also found that 15 taxpayers generated 580 e-way bills involving assessable value of Rs 252.66 crore and tax liability of Rs 31.46 crore without filing GSTR-3B returns, resulting in non-payment of taxes.

The report further noted that 28 cancelled taxpayers generated 3,629 e-way bills involving goods valued at Rs 734.75 crore with tax implications of Rs 99.39 crore before cancellation of registration, but none filed the mandatory GSTR-10 final returns and the department failed to initiate action for recovery of pending tax liabilities.

It also detected 18 e-way bills worth Rs 4.72 crore generated using scrapped, stolen or otherwise suspicious vehicles, while three taxpayers claimed excess Input Tax Credit (ITC) of Rs 9.70 crore over the amount available in GST records. Another cross-PAN analysis found excess ITC claims of Rs 3.33 crore by three taxpayers.

The CAG’s compliance audit on GST oversight found 344 instances of non-compliance among 70 taxpayers, involving revenue implications of Rs 3,071.92 crore and turnover mismatches amounting to Rs 3,710.17 crore. Of 487 high-value inconsistencies identified during centralised audit, the department responded in only 127 cases, initiating remedial action in 91 cases, including 74 show-cause notices involving Rs 2,656.65 crore and 17 ASMT-10 notices amounting to Rs 273.87 crore.

The audit also questioned Delhi’s electricity subsidy policy, noting that subsidy expenditure increased from Rs 2,405.59 crore in 2019-20 to Rs 3,161 crore in 2022-23, a rise of 31 per cent in three years. It observed that the subsidy was extended to nearly the entire domestic consumer base without considering socio-economic status. While over 30 lakh consumers using up to 200 units received an average subsidy of about Rs 6,000 per connection annually, around 16.6 lakh consumers using more than 200 units received an average subsidy exceeding Rs 10,000 per connection, nearly 70 per cent higher.

The report further found that subsidies worth Rs 17.81 crore were provided to more than 50,000 consumers recording zero electricity consumption for over 12 months. Another over 90,000 consumers with zero consumption for six to 11 months received Rs 11.88 crore, while over 1.7 lakh consumers with zero consumption for three to five months received Rs 12.57 crore in subsidies.

In the e-procurement system, the audit found that 1,185 tenders were floated manually despite the availability of an online platform. Of 50,903 registered bidders, 66 were registered without mandatory PAN numbers, while 45 tenders worth Rs 530.25 crore witnessed bids from entities sharing the same PAN.

The audit also found 12,283 bidders registered using only 5,658 email IDs, and 14,527 bids relating to 7,181 tenders worth Rs 3,217.44 crore originated from common IP addresses, raising concerns over system controls and possible collusion.

Besides these findings, the CAG reported Rs 29.45 crore in unfruitful expenditure by DSIIDC, Rs 5.63 crore in avoidable payments by the Public Works Department, Rs 5.50 crore in potential interest loss due to delayed investment of DTC EPF Trust funds, Rs 1.93 crore in avoidable payments by GTB Hospital and Rs 1.56 crore in avoidable expenditure by the Delhi Jal Board arising from procedural lapses.