CAG Haryana GST Audit Flags ₹822.99 Crore Exposure; 57.81% of Responded High-Value Cases Showed Deviations

The Comptroller and Auditor General of India has tabled a focused compliance audit of Haryana's Goods and Services Tax administration that flags control gaps across the e-way bill system, return filing oversight and follow-up on high-value data inconsistencies. Government of Haryana Report No. 2 of 2026 was tabled on September 1, 2026 and carries an overall stated financial implication of ₹822.99 crore.

For Chartered Accountants, GST practitioners and finance teams, the report is useful because many of the audit observations map directly to risk areas that also appear in routine compliance reviews: cancelled registrations, suspicious vehicle details, GSTR-1 and GSTR-3B mismatches, delayed returns, unpaid interest, TDS/TCS short-payment indicators and input tax credit mismatches.

What the CAG audit covered

The report contains two Subject Specific Compliance Audits. The first examines the e-way bill system under GST. The second reviews the Department's oversight of GST payments and return filing in phase II. The official CAG overview provides quantified findings from both areas and records the action reported by the Department in a portion of the cases.

Cancelled registrations and risky e-way bill patterns were flagged

In the e-way bill review, CAG reported that 41 e-way bills were generated after the effective date of cancellation of GST registration. Those transactions involved an assessable value of ₹13.49 crore and fell under five DETCs. The audit also identified four taxpayers that had generated multiple e-way bills on a single invoice.

CAG further reported 12 e-way bill transactions relating to 10 taxpayers, with an assessable value of ₹2.78 crore, involving what it described as risky vehicles. The examples listed in the official overview include stolen, scrapped, surrendered, cancelled or suspended vehicles and two-wheelers. The corresponding outward supplies were also reported as not having been disclosed in GSTR-1.

Another set of 68 e-way bills, generated by 12 taxpayers and involving an assessable value of ₹36.30 crore, was linked to risk indicators such as high-value e-way bills within six months of registration, unusually high PIN-to-PIN distance, Ministry of Corporate Affairs defaulters, Directorate General of Foreign Trade blacklisted entities, parties booked for offences by the Directorate General of Analytics and Risk Management, and invalid PIN codes.

Return-filing oversight produced larger quantified mismatches

The second part of the report focuses on departmental oversight of GST payments and returns. CAG stated that notices in GSTR-3A had not been issued in respect of 6,064 taxpayers who had not filed GSTR-3B for more than seven months during the period 2017-18 to 2019-20.

The audit identified 687 cases of high-value data inconsistencies and recorded that the Department responded in 339 cases. Of those 339 responses, 196 cases, or 57.81 per cent, were found to be compliance deviations with mismatches amounting to ₹738.34 crore. The official overview says relatively higher deviation rates appeared in risk parameters including short payment of tax under TDS/TCS, undischarged tax liability and ITC mismatch.

Department reported recoveries and notices in part of the sample

CAG's overview records that the Department initiated action in 123 of the responded cases. That included recovery of ₹3.49 crore in 17 cases, notices involving ₹582.07 crore in 101 cases, and communication of discrepancies to taxpayers in five cases involving ₹4.60 crore.

The report also states that 19 taxpayers filed monthly GSTR-3B returns with delays ranging from one to 293 days and had not discharged interest liability of ₹1.64 crore. In another area, records were not produced to audit for 87 instances of mismatch between tax liability in GSTR-1 and GSTR-3B involving a money value of ₹356.76 crore.

What CAs and GST teams should take from the report

- Registration status should be part of transaction analytics: e-way bill activity after cancellation of registration is a high-risk pattern that should be identified promptly.

- Vehicle and invoice data can be control signals: duplicate e-way bills, improbable vehicle classes and unusual movement data warrant exception review rather than only return-level reconciliation.

- GSTR-1 to GSTR-3B reconciliation remains fundamental: large mismatches can create both tax exposure and evidence gaps when underlying records are not readily available.

- Interest should be tested separately from principal tax: delayed GSTR-3B filing can leave interest exposure even where the underlying tax has later been paid.

- Risk-based reviews should be documented: TDS/TCS short payment, undischarged liabilities and ITC mismatches were among the parameters where CAG recorded relatively higher deviations.

Practical takeaway: this is an audit report, not a tax demand order against every amount mentioned. The figures represent audit observations and reported financial implications. For practitioners, its main value is as a current checklist of data patterns and control failures that can be tested proactively in GST reviews before they become departmental disputes.

Official source: View the official source document

Key takeaway

A newly tabled official audit report contains unusually specific, quantified GST control findings that are directly useful for CAs, tax reviewers and businesses.