The Comptroller and Auditor General (CAG) uncovered widespread errors in income tax assessments, potentially costing the government ?5,728.8 crore. The CAG also highlighted significant tax evasion in the distilleries and breweries sector, leading to a revenue loss of ?12,781 crore and criticized the government's failure to submit GST compensation fund accounts for audit.
 
New Delhi: The Comptroller and Auditor General (CAG) on Tuesday flagged widespread errors and omissions in income tax assessments resulting in a potential tax loss of ?5,728.8 crore to the exchequer.

The CAG also flagged that despite repeated recommendations and clear statutory obligations, the government had failed to submit last four years' goods and services tax compensation fund accounts for audit and asked it to urgently address the lapse. The national statutory auditor also highlighted significant tax evasion in the distilleries and breweries sector, which led to a revenue loss of ?12,781 crore.


The CAG's report, tabled in Parliament, contained 504 audit observations with a tax effect of ?5,728.8 crore pertaining to errors in levy of interest, irregularities in allowing depreciation, incorrect allowance of business expenditure, unexplained investment or cash credit and arithmetical errors in the computation of income and tax. The report said that the tax department's internal controls were weak, leading to errors in the levy of interest, irregular refunds and incorrect tax assessments.  It also made several recommendations to the Central Board of Direct Taxes including strengthening the existing mechanism for reconciliation of assessment records.