Compliance Audit Report on State Revenues for the period ended March 2023, Government of Maharashtra

A compliance audit of the Stamps & Registration, Finance and Home (Excise) departments for the period ended March 2023, covering a test check of 217 units and two subject-specific compliance audits, one of them on the e-way bill system under GST.

State: Maharashtra
Audit period: 1 Apr 2022 — 31 Mar 2023
Presented: 25 Mar 2026

Findings

Of 51 taxpayers examined, the department cancelled the registrations of 43 — 32 of them classified as non-genuine and cancelled from inception — without taking cognisance of the supplies they had made in the intervening period or recovering the tax due, leaving ₹96.85 crore unrecovered.
“Audit observed that proper officers did not take cognisance of the supplies made by these taxpayers during the intervening period, nor did they ascertain and recover the tax payable before cancellation of the registration. This resulted in non-recovery of tax amounting to ₹ 96.85 crore along with applicable interest.”Executive Summary
Five taxpayers who filed nil returns were shown by their own e-way bills to have made taxable supplies, making ₹3.53 crore recoverable; nine more generated e-way bills for goods worth ₹4.90 crore without filing returns at all.
“Five taxpayers, who had filed 'nil' return during the audit period, were found to have made taxable supplies, as evidenced by their EWBs. Accordingly, they were liable to pay tax of ₹ 3.53 crore which was recoverable with applicable interest. Nine taxpayers did not file returns for several months during the audit period despite generating EWBs during the period. These taxpayers transported goods worth ₹ 4.90 crore having tax effect of ₹ 0.72 crore.”Executive Summary
In seven of 18 cross-state e-way bills examined, goods worth ₹10.59 crore never reached Maharashtra, leaving ₹1.56 crore of tax liability unverifiable.
“Review of 18 EWBs generated by 18 taxpayers from outside Maharashtra for supplies made to the consignees in Maharashtra having same PAN numbers, showed that in seven cases, goods worth ₹ 10.59 crore having tax effect of ₹ 1.56 crore were not received in Maharashtra. Thus, the authenticity of these seven EWBs and the discharge of the associated tax liability amounting to ₹ 1.56 crore could not be verified.”Executive Summary
Misclassifying a document as an article of agreement cost ₹10.50 crore of stamp duty; undervaluing a single Mumbai property, assessed at ₹62.28 crore against a market value of ₹100.11 crore, cost ₹1.89 crore.
“The Department applied a reduced rate of Stamp Duty due to misclassification of document as Article of Agreement, which resulted in short levy of Stamp Duty of ₹ 10.50 crore. The Collector of Stamps, Mumbai, valued a property at ₹ 62.28 crore and levied Stamp Duty of ₹ 3.11 crore under Article 5(g-a). However, Audit assessed the market value at ₹ 100.11 crore, calculating the Stamp Duty payable as ₹ 5.00 crore. This led to a short levy of ₹ 1.89 crore by the department, due to undervaluation of the property.”Executive Summary
An irregular one per cent concession allowed by the Inspector General of Registration cost ₹1.50 crore, and treating a licence renewable to ten years as a five-year one cost ₹29.71 lakh.
“Inspector General of Registration and Controller of Stamps, Maharashtra State, Pune allowed irregular concession of one per cent, which led to short levy of Stamp Duty of ₹ 1.50 crore... The department calculated Stamp Duty based on a five-year license agreement, ignoring the clause that allows renewal for another five years, making the total period 10 years. This resulted in short levy of Stamp Duty and Registration Fee of ₹ 29.71 lakh.”Executive Summary

Findings

Of 51 taxpayers examined, the department cancelled the registrations of 43 — 32 of them classified as non-genuine and cancelled from inception — without taking cognisance of the supplies they had made in the intervening period or recovering the tax due, leaving ₹96.85 crore unrecovered.

“Audit observed that proper officers did not take cognisance of the supplies made by these taxpayers during the intervening period, nor did they ascertain and recover the tax payable before cancellation of the registration. This resulted in non-recovery of tax amounting to ₹ 96.85 crore along with applicable interest.”Executive Summary

Five taxpayers who filed nil returns were shown by their own e-way bills to have made taxable supplies, making ₹3.53 crore recoverable; nine more generated e-way bills for goods worth ₹4.90 crore without filing returns at all.

“Five taxpayers, who had filed 'nil' return during the audit period, were found to have made taxable supplies, as evidenced by their EWBs. Accordingly, they were liable to pay tax of ₹ 3.53 crore which was recoverable with applicable interest. Nine taxpayers did not file returns for several months during the audit period despite generating EWBs during the period. These taxpayers transported goods worth ₹ 4.90 crore having tax effect of ₹ 0.72 crore.”Executive Summary

In seven of 18 cross-state e-way bills examined, goods worth ₹10.59 crore never reached Maharashtra, leaving ₹1.56 crore of tax liability unverifiable.

“Review of 18 EWBs generated by 18 taxpayers from outside Maharashtra for supplies made to the consignees in Maharashtra having same PAN numbers, showed that in seven cases, goods worth ₹ 10.59 crore having tax effect of ₹ 1.56 crore were not received in Maharashtra. Thus, the authenticity of these seven EWBs and the discharge of the associated tax liability amounting to ₹ 1.56 crore could not be verified.”Executive Summary

Misclassifying a document as an article of agreement cost ₹10.50 crore of stamp duty; undervaluing a single Mumbai property, assessed at ₹62.28 crore against a market value of ₹100.11 crore, cost ₹1.89 crore.

“The Department applied a reduced rate of Stamp Duty due to misclassification of document as Article of Agreement, which resulted in short levy of Stamp Duty of ₹ 10.50 crore. The Collector of Stamps, Mumbai, valued a property at ₹ 62.28 crore and levied Stamp Duty of ₹ 3.11 crore under Article 5(g-a). However, Audit assessed the market value at ₹ 100.11 crore, calculating the Stamp Duty payable as ₹ 5.00 crore. This led to a short levy of ₹ 1.89 crore by the department, due to undervaluation of the property.”Executive Summary

An irregular one per cent concession allowed by the Inspector General of Registration cost ₹1.50 crore, and treating a licence renewable to ten years as a five-year one cost ₹29.71 lakh.

“Inspector General of Registration and Controller of Stamps, Maharashtra State, Pune allowed irregular concession of one per cent, which led to short levy of Stamp Duty of ₹ 1.50 crore... The department calculated Stamp Duty based on a five-year license agreement, ignoring the clause that allows renewal for another five years, making the total period 10 years. This resulted in short levy of Stamp Duty and Registration Fee of ₹ 29.71 lakh.”Executive Summary