Office of CAG may have to pay service tax
PTI | 11:06 PM,Jun 01,2012
Mumbai, Jun 1 (PTI) The office of Comptroller and Auditor General (CAG) which audits accounts of government companies may have to pay service tax if the Central Excise and Service Tax Department has its way. The department is contemplating to collect service tax from CAG which charges fees for its services, an internal communication circulated by the department among its officials has revealed. A letter signed by Jagjit Pavadia, Chief Commissioner of Customs, Excise and Service Tax, dated May 30, said, "The Commissioner of Central Excise and Customs, Nagpur, has informed that the commercial audit wing of CAG conducts audit of accounts of government companies and charges fees from them." "The said service of conducting audit of accounts falls under the taxable services of practising chartered accountants, cost accountants and company secretaries. However, the CAG is not discharging its service tax liability all over India against the services provided by it," the letter said. The letter further said that the enquiry conducted so far has revealed that the office of AG (Audit II), Nagpur conducts audit of accounts of certain Central Public Sector Undertaking, statutory corporations, autonomous organisations and collects fees from them for the same. "Preliminary enquiry reveals that they (CAG) has received Rs 3.3 crore (approximately) from three organisations in the last five years for providing services, but has failed to pay Rs 33 lakh as service tax on such taxable services provided by it. The investigation is being finalised shortly for the issue of SCN", said the letter. The letter further said that the commercial audit by the AG's office in Nagpur is conducted only in a few cases in Nagpur and major activities are undertaken in metro cities. "Since the issue has all India ramifications, the same is brought to your notice for further necessary action at your end," the letter concluded.
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