₹1,954.30 crore in audit observations unsettled in Andhra Pradesh Commercial Taxes Department

This audit examined the compliance of the Revenue Department of the Government of Andhra Pradesh, specifically covering Commercial Taxes, Registration & Stamps, and the Chief Commissioner of Land Administration, for the period ended March 2023.

Who it concerns: Government of Andhra Pradesh (Revenue Department), including Commercial Taxes, Registration & Stamps, and Chief Commissioner of Land Administration.

What the auditor found

• Outstanding audit observations in Commercial Taxes Department totaling ₹ 1,954.30 crore (1,588 Inspection Reports) remained unsettled as of September 2023.
• Non-levy of interest and penalty on belated tax payments resulted in a loss of ₹ 4.70 crore in 87 cases.
• Incorrect determination of Central Sales Tax turnover led to a short levy of tax of ₹ 1.40 crore in nine cases.
• Non-compliance with penalty provisions for delayed returns or under-declaration of tax resulted in a short levy of ₹ 0.94 crore in six VAT cases.
• Omission of taxable turnover due to non-consideration of advances resulted in a short levy of tax of ₹ 40.10 lakh.
• Payment of Conversion tax at less than prescribed rates and non-collection of penalties resulted in non-realization of revenue of ₹ 5.82 crore in 23 cases.
• Misclassification of documents (e.g., Mortgage Deeds as Deposit of Title Deeds) resulted in a short levy of duties of ₹ 8.35 crore in 32 registered documents.
• Deviation from valuation procedures (incorrect rate/market value) resulted in a short levy of duties of ₹ 2.67 crore in 30 registered documents.
• Omission of distinct transactions (e.g., Partition, Release, Settlement) resulted in a short levy of duties of ₹ 1.07 crore in 33 registered documents.
• Failure to consider chargeable values from the CARD system resulted in short collection of duties of ₹ 64.67 lakh in 11 documents.
• Follow-up audit found 'insignificant or no progress' in implementing CAG recommendations for a formal mechanism to revise market values, with variations between approved and open market prices reaching up to 1,500 percent in sampled units.
• CAG recommended the Government evolve a mechanism for the expeditious settlement of outstanding audit observations.

Also in the document

• CAG reported that ₹ 1,954.30 crore in audit observations for the Commercial Taxes Department remained unsettled as of September 2023.
• CAG found that in 22 out of 42 sampled units, the variation between existing and proposed market values was up to 1,500 percent, with no specific mechanism or documentation to assure the accuracy of revised values.
• CAG noted that in nine cases, the market value of properties was depicted as '0' or '1' in system-generated check-slips, indicating an absence of alert mechanisms in the CARD system.