Misuse of warehouse facility led to blockage of revenue: CAG

Apex government auditor CAG today said unjustified extension and lack of timely action for preventing misuse of the warehousing facilities led to the 'blockage of substantial revenue' to Customs Department.

"Unjustified extension and lack of timely and effective action for preventing misuse of the facilities led to blockage of substantial revenue," said a Comptroller and Auditor General Of India (CAG) report tabled in Parliament today.

Compliance audit report of Department of Revenue said monitoring of warehouses was weak and maintenance of records was improper.

There was sufficient coverage of inspection or audit by departmental officers and customs audit parties, it said.

"Non-initiation of action under the Customs Act, 1962 also resulted in blockage of large amount of government revenue, which would inevitably turn into loss with the passage of time due to deterioration and loss of commercial value of goods," it said.

The CAG report advised the department that it should improve the compliance to rules and regulations and strengthen its internal controls.

Customs revenue of Rs 1,183.5.91 crore demanded up to March 2013, was not realised by the department. Of this, Rs 2,468 crore was undisputed, it said.

The report also noted that the customs revenue as a ratio of GDP has been stagnant at around 1.7 per cent.

The audit check, it said, has also revealed several instances of violation of rules, regulations and procedures framed under the Act relating to warehousing and clearance of goods.