Odisha GST collection struggles as CAG flags ₹2,500 crore recovery gap

The Comptroller and Auditor General's latest report has exposed critical weaknesses in Odisha's GST administration, raising concerns about revenue leakage and compliance gaps in the state's tax system. The audit found that recovery efforts have lagged significantly, with authorities managing to collect only around ₹110 crore out of over ₹2,500 crore in assessed GST demands, indicating a substantial collection efficiency problem.

Beyond the recovery shortfall, auditors flagged multiple operational deficiencies that may be undermining the tax base. The report highlighted instances of excess input tax credit claims, where businesses have claimed larger deductions than permissible, alongside inadequate oversight of e-way bill documentation used to track goods movement across state lines. These lapses suggest gaps in verification and validation protocols within the state's tax administration machinery.

The findings come at a time when states are under pressure to optimize GST collections to meet revenue targets. Odisha's poor recovery rate indicates either weak enforcement mechanisms or procedural bottlenecks that are preventing authorities from collecting legitimately assessed taxes. The audit report underscores the need for strengthened administrative capacity and tighter compliance monitoring to plug leakages in the system.

Experts suggest that addressing the identified gaps—particularly in input credit verification and e-way bill tracking—could significantly improve revenue realization for the state. The report is expected to prompt corrective action from the state's tax authorities to strengthen collection procedures and compliance mechanisms.