Indirect Tax

Report No.41 of 2017 - Compliance Audit of Department of Revenue – Customs Union Government

Date on which Report Tabled:
Tue 19 Dec, 2017
Date of sending the report to Government
Government Type
Union Department
Indirect Tax
Sector Taxes and Duties


This report contains audit observations on significant revenue losses and/ or under assessment noticed in different Customs Commissionerates audited by the Comptroller and Auditor General of India.  Audit findings are summarised in four chapters, namely Irregularities in duty exemption/remission schemes, Incorrect application of general exemption notifications, Short/Non-recovery of applicable levies and other charges and Misclassification of goods.  Chapter I of the Report provides an overview of growth trends of Customs Revenue, analysis of revenue foregone, cost of collection of taxes and department’s internal control mechanism.

The total revenue implication of the Audit Report is ` 85 crore, out of which recovery of ` 19 crore has been effected and the Government has reported initiating rectificatory action in cases involving revenue implication of ` 30 crore.

According to the revenue figures reported in the Union Finance Accounts for the year 2016-17 and data maintained by Central Board of Excise and Customs (CBEC) imports have registered a growth of 4 per cent during FY 2016-17 over previous year, while exports moved up by 8 percent during the same period.  Customs Revenue was 13 percent and 26 percent respectively as percentage of Gross Tax Revenue and Indirect Taxes.  Revenue forgone as a percentage of Customs Receipts was 172 percent in FY 16-17.  Six export promotion and remission schemes accounted for 96 per cent (` 87732 crore) of total revenue foregone under the Schemes.

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