Bring unregistered developers under GST net: CAG to Maharashtra govt

In an audit exercise carried out in Mumbai, the CAG had found that 54 per cent of the builders, who had completed projects and sold homes in 2017-18 and were test checked, were unregistered with the GST.

The Comptroller and Auditor of India (CAG) has asked the Maharashtra government to survey construction firms across Maharashtra.

Indicating that several builders and developers were yet to become Goods and Services Tax (GST) compliant, the CAG, in a report submitted to the state legislature Wednesday, asked the government to ensure that all unregistered developers are brought under the GST net.

In an audit exercise carried out in Mumbai, the CAG had found that 54 per cent of the builders, who had completed projects and sold homes in 2017-18 and were test checked, were unregistered with the GST. “The audit had called for details of builders and developers who had completed their construction works under Mumbai municipality. It furnished a list of 99 such builders and developers. On cross verification it was found that 53 of them were not registered with the sales tax department,” the report stated.

Blaming the sales tax department for the lapse, the CAG further observed that “while the department was required to conduct a survey for the identification of unregistered builders, it did not take any pains to undertake such a survey”.

The CAG has now asked the department to undertake the survey to identify all unregistered builders and bring them under the tax net.

The report, meanwhile, has also found that the total arrears in Value Added Tax (VAT) and GST collections had risen to Rs 1.08 lakh crore, of which Rs 47,358 crore (or 44 per cent) was locked in disputes, while Rs 4,059 crore was recoverable from dealers who are untraceable.