The Comptroller and Auditor General ( CAG ) of India has released the Indirect Taxes – Goods and Services Tax Audit report for FY 2021-22, revealing many key details about the revenue collection situation in the Indian Indirect Tax – GST regime.
The Audit Report No 7 of 2024 highlights significant revenue shortfalls under the Goods and Services Tax ( GST ) regime, primarily due to gaps in compliance, inaccurate projections, and systemic inefficiencies.
The Central GST ( CGST ) revenue consistently failed to meet the budget targets in the early years:
2018-19: 22% shortfall
2019-20: 10% shortfall
2020-21: 21% shortfall
However, in 2021-22, the actual GST collections exceeded the budget estimates by 11%, reflecting a recovery attributed to economic rebound and enhanced compliance.
A significant portion of Integrated GST ( IGST ) balances has been retained in the Consolidated Fund of India, reducing timely apportionment to states:
2018-19: ₹13,944 crore
2019-20: ₹9,125 crore
2020-21: ₹7,251 crore
2021-22: ₹2,119 crore
This delayed distribution affects states’ ability to manage revenue deficits amidst non-compliance and revenue leakages.
Systemic issues with GST return scrutiny and compliance monitoring were highlighted:
Of 8,220 inconsistencies reviewed, 15% were clear compliance deficiencies, with revenue implications of ₹2,203.57 crore.
Key issues included:
Non-payment of interest
Incorrect Input Tax Credit ( ITC )
Undervaluation of supplies
Short payment of tax under Reverse Charge Mechanism ( RCM )
The GST Compensation Fund accounts for FY 2017-18 to FY 2020-21 remain unaudited, hindering transparency and timely state compensation. The statutory role of the audit could not be completed due to the absence of these records.
While GST revenue grew 27.3% in FY22 over FY21, achieving ₹7,02,105 crore, it remained lower than pre-pandemic years relative to GDP.
Efforts such as rate rationalization and enhanced anti-evasion measures contributed to this recovery.
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