Kohima, April 2 (MExN): On performance review in utilization of declaration forms in Interstate Trade, the audit reports of the Comptroller & Auditor General (CAG) of India on Government of Nagaland said the Central Sales Tax (CST) Act, 1956 and the Rules framed there under provide for concessional rate of tax in respect of inter-state sales of goods and exemption from tax in respect of branch transfers and export sales. The state government grants these incentives to dealers for furtherance of trade and commerce, on production of prescribed declaration forms viz ‘C’ and ‘F’.
Failure to furnish the declarations or submission of defective or incomplete declaration forms will make the transactions liable to tax as applicable to sale in the appropriate state. It is the responsibility of the commercial tax department to ensure proper accountal of declaration forms and to take adequate safeguards against misutilisation of declaration forms/certificates on which tax relief is allowed involving large amount of revenue to the state exchequer. As performance review on implementation of the scheme revealed the following “major deficiencies.”
The report said the department failed to conduct timely verification of stock register which led to short receipt and probable misuse of 1375 “C” forms.
Three dealers concealed purchase turnover of Rs. 10. 84 crore by utilizing invalid/fake “C” forms which led to non-levy of tax and corresponding evasion of tax of Rs. 1.36 crore. Besides, penalty of Rs. 4.08 crore was also leviable.
Five dealers imported goods worth Rs. 9.16 crore by utilizing 11 “F” forms (Rs. 8. 29 crore) and three “C” forms (Rs.0.87 crore) which were not disclosed in their accounts. The assessing officers also accepted the returns filed by the dealers without cross verifying the utilization of the declaration forms which resulted in concealment of turnover of Rs. 9.16 crore and evaded tax payment of Rs. 1.17 crore. Besides, penalty of Rs. 3.51 crore was also leviable.
Exemption of tax on sales worth Rs. 42.02 crore was allowed by the assessing officers without documentary evidence which resulted in undue exemption of tax to the tune of Rs. 4.13 crore.
Three unregistered dealers utilized 18 “F” forms and irregularly imported goods worth Rs. 3.82 crore from three selling dealers registered in other states.
Against the import of goods worth Rs. 3.10 crore by seven dealers of Nagaland, the purchasing dealers submitted utilization statements for Rs. 0.48 crore resulting in concealment of purchase turnover of Rs. 2.62 crore and possible evasion of tax amounting to Rs. 31.56 lakh.
A dealer concealed import of goods valued at Rs. 10.17 crore from Meghalaya being stock transferred against “F” forms during 2005-07 which led to evasion of tax to the tune of Rs. 1.27 crore.
