Compliance Audit Report for the year ended March 2022, Government of the Union Territory of Puducherry

This report carries two subject-specific compliance audits — the Commercial Taxes Department's oversight of GST payments and return filing, and the four loss-making public sector undertakings of Puducherry over 2017-18 to 2021-22 — together with six compliance audit paragraphs on stamp duty, rent allowance, public works and road contracts. Puducherry's receipts in 2021-22 were ₹10,943 crore against expenditure of ₹10,369 crore.

State: Puducherry
Audit period: 1 Apr 2017 — 31 Mar 2022
Presented: 12 Feb 2025

Findings

Four of Puducherry's thirteen public sector undertakings — PASIC, PAPSCO, the Road Transport Corporation and the Tourism Development Corporation — had an accumulated loss of ₹388.51 crore as on 31 March 2022.
“There were 13 Public Sector Undertakings (PSUs) in Union Territory of Puducherry as on 31 March 2022. Out of these 13 PSUs, four PSUs viz., Puducherry Agro Services and Industries Corporation Limited (PASIC), Puducherry Agro Products, Food and Civil Supplies Corporation Limited (PAPSCO), Puducherry Road Transport Corporation Limited (PRTC) and Puducherry Tourism Development Corporation Limited (PTDC) which were incurring losses, had been taken up for Compliance Audit... The accumulated loss in the above four PSUs as on 31 March 2022 was ₹388.51 crore.”Overview
Not invoking the lay-off provisions of the Industrial Disputes Act cost PASIC ₹29.07 crore in wages for regular employees plus a ₹12.13 crore commitment to workmen — ₹41.20 crore of avoidable manpower cost.
“Non-exercise of lay off for regular staff under Industrial Disputes Act, 1947 by PASIC, led to an extra expenditure of ₹29.07 crore on regular employees in addition to commitment to pay ₹12.13 crore to workmen thereby incurring avoidable manpower cost to the extent of ₹41.20 crore.”Overview
PASIC forwent ₹9.10 crore by failing to sustain wholesale vegetable supply to government departments, ₹22.89 crore through delayed closure of its agro depots, and ₹2.14 crore by running its compost and bio-fertiliser units below capacity.
“PASIC failed to operate its Organic Compost and Bio-fertiliser units at full capacity, resulting in forgoing revenue to the extent of ₹2.14 crore. Failure of PASIC to sustain wholesale supply of vegetable to the Government Departments resulted in a loss to the extent of ₹9.10 crore during 2017-22. Further, the delay in closure of the Agro depots led to an avoidable extra expenditure and loss to PASIC by ₹22.89 crore.”Overview
At the Road Transport Corporation the share of overaged buses rose from 15.71 per cent at the end of 2017-18 to 64.29 per cent at the end of 2021-22, and 41 buses had not run at all up to March 2022.
“In PRTC, due to non-introduction of new buses, the percentage of overaged buses was 15.71 per cent at the end of 2017-18 which had increased to 64.29 per cent at the end of 2021-22... PRTC has not set any target for fleet utilization and 41 buses were not operated upto March 2022 from different date ranging between 2014-15 and 2020-21.”Overview
In the GST compliance audit, deviations from the Act were noticed in 49 cases involving ₹19.98 crore, and incomplete records in 25 taxpayers' returns left ₹35.11 crore of potential risk exposure on input tax credit and tax payments.
“Audit noticed deviations from the provisions of the Act in 49 cases involving an amount ₹19.98 crore... In respect of detailed audit of 25 taxpayers' Returns, granular records such as financial statements, supplementary financial ledgers, etc., were not produced in five cases and in the rest of 20 cases, the granular records were produced partially. These cases represent a potential risk exposure of ₹35.11 crore towards identified mismatches in ITC availment and tax payments.”Overview

Findings

Four of Puducherry's thirteen public sector undertakings — PASIC, PAPSCO, the Road Transport Corporation and the Tourism Development Corporation — had an accumulated loss of ₹388.51 crore as on 31 March 2022.

“There were 13 Public Sector Undertakings (PSUs) in Union Territory of Puducherry as on 31 March 2022. Out of these 13 PSUs, four PSUs viz., Puducherry Agro Services and Industries Corporation Limited (PASIC), Puducherry Agro Products, Food and Civil Supplies Corporation Limited (PAPSCO), Puducherry Road Transport Corporation Limited (PRTC) and Puducherry Tourism Development Corporation Limited (PTDC) which were incurring losses, had been taken up for Compliance Audit... The accumulated loss in the above four PSUs as on 31 March 2022 was ₹388.51 crore.”Overview

Not invoking the lay-off provisions of the Industrial Disputes Act cost PASIC ₹29.07 crore in wages for regular employees plus a ₹12.13 crore commitment to workmen — ₹41.20 crore of avoidable manpower cost.

“Non-exercise of lay off for regular staff under Industrial Disputes Act, 1947 by PASIC, led to an extra expenditure of ₹29.07 crore on regular employees in addition to commitment to pay ₹12.13 crore to workmen thereby incurring avoidable manpower cost to the extent of ₹41.20 crore.”Overview

PASIC forwent ₹9.10 crore by failing to sustain wholesale vegetable supply to government departments, ₹22.89 crore through delayed closure of its agro depots, and ₹2.14 crore by running its compost and bio-fertiliser units below capacity.

“PASIC failed to operate its Organic Compost and Bio-fertiliser units at full capacity, resulting in forgoing revenue to the extent of ₹2.14 crore. Failure of PASIC to sustain wholesale supply of vegetable to the Government Departments resulted in a loss to the extent of ₹9.10 crore during 2017-22. Further, the delay in closure of the Agro depots led to an avoidable extra expenditure and loss to PASIC by ₹22.89 crore.”Overview

At the Road Transport Corporation the share of overaged buses rose from 15.71 per cent at the end of 2017-18 to 64.29 per cent at the end of 2021-22, and 41 buses had not run at all up to March 2022.

“In PRTC, due to non-introduction of new buses, the percentage of overaged buses was 15.71 per cent at the end of 2017-18 which had increased to 64.29 per cent at the end of 2021-22... PRTC has not set any target for fleet utilization and 41 buses were not operated upto March 2022 from different date ranging between 2014-15 and 2020-21.”Overview

In the GST compliance audit, deviations from the Act were noticed in 49 cases involving ₹19.98 crore, and incomplete records in 25 taxpayers' returns left ₹35.11 crore of potential risk exposure on input tax credit and tax payments.

“Audit noticed deviations from the provisions of the Act in 49 cases involving an amount ₹19.98 crore... In respect of detailed audit of 25 taxpayers' Returns, granular records such as financial statements, supplementary financial ledgers, etc., were not produced in five cases and in the rest of 20 cases, the granular records were produced partially. These cases represent a potential risk exposure of ₹35.11 crore towards identified mismatches in ITC availment and tax payments.”Overview