CAG Slams DG, Valuation
THE latest CAG Report states that none of the objectives for setting up the DGOV database were achieved.
The Directorate General of Valuation (DGOV), Mumbai was established in the year 1997 to assist the Board in policy maters concerning valuation. To carry out this task, the DGOV had to develop a comprehensive real time electronic database of imported and exported goods which would fulfill the following objectives:-.
++ The assessing officers would have instant access to the data to check for cases of undervaluation/overvaluation;
++ Check abuse of export incentive schemes and valuation frauds;
++ Monitor sensitive commodities which were prone to undervaluation;
++ Maintain a central registry of special valuation (SVB) cases;
++ Provide assistance to the Board for fixation of tariff value and transfer pricing;
++ Monitoring of valuation risk component of risk management system (RMS) under Indian Customs Data Interchange System (ICES);
++ Generating valuation alerts, publishing valuation bulletins and resolving valuation disputes.
Given the multiple uses of the database, completeness of data was a prerequisite for doing any reliable analysis.
CAG found that the import/export data was incomplete and could not be used as the base data for any realistic analysis. The value of imports and exports for the total transactions captured in the DGOV database for the customs tariff heading 71 was way below the actual trade figures reported by the Ministry of Commerce and Industries on the DGFT website.
CAG concluded that it was not possible to use the DGOV data for any meaningful analysis as only a small portion of the total data was being captured. Therefore, none of the objectives for setting up the DGOV database were achieved.
CAG Recommendation : the database of international trade should be kept updated, especially with the DPCC data, so that it can be utilised for the various purposes for which it has been created. This can also enable sharing of data with other tax authorities for detection of cases of duty evasion.