Compliance Performance

Report No.3 of 2019 - Revenue Sector, Government of Kerala

Date on which Report Tabled:
Wed 12 Feb, 2020
Date of sending the report to Government
Thu 06 Feb, 2020
Government Type
Sector Taxes and Duties


This Audit Report features one Performance Audit and 17 Compliance Audit paragraphs involving revenue impact of Rs.938.56 crore. The Audit Report is divided into five chapters.

Chapter I contains general information gathered about various departments having revenue receipts, their response to Audit etc.

Chapter II contains a Compliance Audit on the ‘Mechanism of disposal of Appeals and Implementation of Appellate orders in SGST Department’ with revenue impact of Rs.383.17 crore. The objective of Audit was to ascertain whether the appellate authorities processed the appeals as per the Acts and Rules. This brought to light certain issues such as non-recovery of disputed tax even though appeal was not filed by the assessee, non-initiation of action by the assessing authorities on the orders of first appellate authorities etc. Compliance Audit paras on short levy of tax and non-payment of GST on inward supply of Extra Neutral Alcohol by the Distilleries are also included in the report.

Chapter III contains a Compliance Audit on the ‘Functioning of Kerala Road Safety Authority-Collection and Utilisation under Road Safety Fund’ with revenue impact of Rs.455.93 crore conducted with the objective of ascertaining whether the Authority carried out its function effectively and that the amount was collected, accounted, transferred and utilised as per KRSA Act, 2007 covering the period from 2013-14 to 2017-18. Other paragraphs relating to non/short levy of one-time tax, green tax etc. are also discussed in the report.

Chapter IV contains a Compliance Audit on the ‘Implementation of Land Ceiling and Management of Surplus Land in Kerala’. This pointed out the lapses in acquisition, utilisation and management of surplus land in Kerala. Issues such as absence of database of ceiling cases and surplus lands, non-identification/non-reporting of land in excess of ceiling limit, non-initiation of ceiling cases, violations of exemption, delay in finalisation of ceiling cases and acquisition of surplus land etc. were noticed. Instances of non/short levy of building tax and basic tax are also incorporated.

Chapter V: The Compliance Audit paragraphs on Excise Department covered issues such as bottling of other State brands of IMFL in Kerala, non-inclusion of import fee element in the purchase cost for levying excise duty, non-disposal of IMFL on the stoppage of production etc. The Performance Audit on Functioning of OPEN PEARL in Registration Department was conducted with the objectives of identifying whether the application enhanced the efficiency of the Department in delivery of services and addressed the weaknesses in the earlier system (PEARL). It was observed that the system has not been optimised to achieve the objectives even after nine years, rendering the expenditure of Rs.42.20 crore unfruitful. Two paragraphs on loss of revenue due to non-compliance of Registration Act and Kerala Stamp Act are also discussed.

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