CAG asks CBEC to beef up monitoring mechanism

The Comptroller and Auditor General of India (CAG) has asked the Central Board of Excise and Customs (CBEC) to strengthen its mechanism of monitoring non/late-filers of service tax.
"Monitoring mechanism to watch non/late-filers should be strengthened in view of determination of service tax payments through self-assessment," the CAG report, which was tabled in Parliament, said today.
During a test check audit, CAG found that no action was taken at the commissionerate level.
It suggested that in the automated environment of ACES (automation of central excise and service tax), CBEC should consider automatic levy of late fee on belated filing of returns.

CAG also pointed out that "on examination" of records, "we identified 425 work contractors who had executed work contracts had neither registered with the department nor paid service tax of Rs 447.76 crore".
Works contract service (WCS) was among the top 10 contributors to service tax collections, and in 2013-14, Rs 7,434 crore accounting for 4.80 per cent of overall service tax collection came from WCS.
CAG conducted the performance audit on assessees providing works contract services to seek an assurance that the indirect tax administration is adequately placed to take care of revenue flow.
The audit, which included examination of records relating to 237 assessees, was conducted at 33 selected commissionerates.