Total service tax arrears rose to Rs 1.66 lakh crore in 2017-18, up from Rs 1.18 lakh crore in the preceding financial year, said a CAG report tabled in Parliament Monday. Similarly, in respect of central excise, total arrears increased to Rs 96,496 crore in FY 2017-18 from Rs 84,200 crore in the previous year. “Further, recovery as a percent of gross arrears had reduced from 1.19 percent in 2016-17 to 1.02 percent in 2017-18 for service tax. “Similarly, recovery as a percent of gross arrears had reduced from 1.85 percent in 2016- 17 to 1.27 percent in 2017-18 for central excise,” said the audit report of Comptroller and Auditor General of India (CAG).
It also stated that in central excise, 45,749 cases involving revenue of Rs 1,04,718 crore were pending in appeals at the end of 2017-18 registering a marginal decrease of 3.5 percent over the amount pending at the end of the previous fiscal. In service tax, 43,718 cases involving service tax revenue of Rs 1,20,907 crore were pending in appeals at the end of 2017-18 registering one percent decrease over the amount pending at the end of the preceding year. The report has 263 audit paragraphs containing 369 audit observations on central excise and service tax, having a financial implication of Rs 465.55 crore. The CAG examined and found shortcomings in monitoring mechanism for recovery of arrears in Central Board of Indirect Taxes and Customs (CBIC).