The Telegraph
Friday , January 17 , 2014
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Fuel bill mess in ‘taxed’ civic body

Poor bill verification and logbook maintenance triggered huge financial anomalies in the civic body, accused of evading service tax and education cess.

An internal audit report conducted under the Support Programme for Urban Reforms (SPUR) of the urban development and housing department for the period between July 2012 and April 2013 has revealed huge financial anomalies related to fuel coupons and verification of bills of petrol pumps for municipal vehicles.

Logbook entry has not been found for 15,323 litres of fuel. Bills for another 3,264 litres of fuel were issued but the vehicle concerned was not refuelled.

The Patna Municipal Corporation (PMC) has also been found guilty of service tax and education cess evasion against taxes collected from shopkeepers in Maurya Lok complex for repair and maintenance between 2006-07 and 2010-11. Additional commissioner, central excise and service tax directorate, Patna, has demanded the tax amount of Rs 14,97,810 plus 100 per cent penalty from the PMC.

On the issue of fuel bills and maintenance of logbooks, the audit report stated that the PMC authorities were not checking the logbooks of vehicles with the fuel coupons’ register on a regular basis. It also observed that photocopy of logbooks was used during the audit period (2012-13) for the payment of vehicles’ rent used by the civic body.

PMC commissioner Kuldip Narayan said action would be taken against the errant officers based on final findings of the ongoing audit. “A number of audits are going on in PMC at present. The queries raised by the auditor are referred to the officer concerned and they are asked to provide the required/missing documents. If they fail to do so and the audit report proves financial anomalies, administrative action would be initiated against them,” said Narayan.

With regard to the non-payment of service tax, a scrutiny by the officers of the accountant-general (audit), Patna, stated that PMC collected maintenance charges from shops at Maurya Lok Complex between 2006-2011 but neither made service tax registration nor paid service tax.

The central excise and service tax directorate, Patna, asked PMC to deposit the pending service tax. But the civic body claimed that it did not fall under the purview of the service tax law because it was a non-profit organisation and its income was spent on the society’s welfare. Several letters addressed to former municipal commissioners to provide details of maintenance or service charges collected during the five financial years failed to evoke any response.

Later, the AG office collected the details of the maintenance accounts of PMC at Bihar State Co-operative Bank, Maurya Lok branch, and found Rs 1,35,10,286 was collected from the shops at the complex. Subsequently, showcause notices were issued by the joint/additional commissioner of the central excise and service tax, Patna, for suppressing facts for the purpose of evading service tax payments. Hearings were held in 2012 and 2013 but PMC did not strongly defend its case. Finally, the additional commissioner, central excise and service tax, Vinayak Chandra Gupta, demanded payment of the pending service tax with 100 per cent penalty in an order on January 2.