Chennai: The Comptroller and Auditor General (CAG) flagged revenue lapses amounting to ₹1,721 crore in Tamil Nadu for 2022–23 but found that the govt managed to recover only ₹11.5 crore the next year.The CAG’s `Report on State Revenues for 2023′ said centralised GST audits alone detected irregularities worth ₹1,538 crore pertaining to 337 cases. While notices were issued in all cases and the department accepted the findings, recoveries stood at just ₹8.64 crore. In several instances, assessments were not completed for more than three years even after taxpayers submitted replies, the audit said.The CAG also highlighted a major blind spot after GST registrations were cancelled. Of nearly 2.98 lakh cancelled registrations, 2.64 lakh businesses did not file mandatory final returns. As a result, the tax department could not assess potential dues in over 2.81 lakh cases. Despite this, fresh GST registrations were granted to more than 16,500 applicants who did not file final returns from earlier registrations, weakening controls meant to safeguard revenue. Lapses were also found at the entry stage of the tax system, said the report. The audit said GST registrations were granted without completing physical verification in cases where Aadhaar authentication was not done or where officers themselves ordered verification. Such gaps, the CAG noted, increased the risk of non-genuine registrations and future tax leakage. Further, the report identified 952 taxpayers who were wrongly allowed to opt for the composition scheme, a concessional tax route meant for small businesses. These taxpayers paid GST at lower rates despite being ineligible, resulting in loss of revenue. The weak recovery came against the backdrop of mounting arrears. Outstanding revenue dues across departments stood at ₹44,289.54 crore as of March 31, 2023, with over ₹22,595 crore pending for more than 5 years, indicating prolonged delays in enforcement. Beyond GST, the audit flagged losses in stamp duty and registration fees through undervaluation of property, unregistered transfers during corporate restructuring, and inconsistencies in land transactions, with individual cases involving losses running into several crores.
