CAG raps IITs – Service Tax not collected
The mighty IITs don’t impress our auditors. They have caught the top technocrats of the nation napping. The Audit highlighted,
Irregular expenditure due to non-recovery of service tax Indian Institute of Technology (IIT), Delhi; Kharagpur; Mumbai; MNNIT Allahabad; NITIE Mumbai and VNIT Nagpur failed to recover service tax amounting to Rs. 1.16 crore from their clients on consultancy services rendered to them and incurred expenditure out of their own funds for depositing the tax.
Audit noted that IIT, Delhi had received Rs. 4.21 crore on account of consultancy services rendered during the period from 16 July 2001 to 26 December 2002 without recovering service tax of Rs. 21.05 lakh at the prevailing rate of five percent. In response to Audit observation (February 2004), the Institute deposited (April 2004) Rs. 21.05 lakh as service tax out of its own income instead of recovering it from the clients. Thus, failure to adhere to the statutory conditions relating to recovery of service tax resulted in the IIT incurring expenditure out of its own funds. IIT Delhi also confirmed the facts and added that it had started collecting service tax from clients from 27 December 2002. Other IITs were not lagging behind.