Nagpur's Central Excise and Service Tax Department has sent a notice to government auditor, the Comptroller and Auditor General (CAG), stating that it has not paid its service tax.

Inquiries reveal that the CAG received Rs. around 3.3 crore from three organisations in Nagpur in the last five years for providing services. However, it failed to pay Rs. 33 lakh as service tax.

An internal communication signed by Jagjit Pavadia, Chief Commissioner of Customs, Excise and Service Tax, dated May 30, said, "The Commissioner of Central Excise and Customs, Nagpur, has informed that the commercial audit wing of CAG conducts audit of accounts of government companies and charges fees from them."

"The said service of conducting audit of accounts falls under the taxable services of practising chartered accountants, cost accountants and company secretaries. However, the CAG is not discharging its service tax liability all over India against the services provided by it," the letter said.

The letter further said that the enquiry conducted so far has revealed that the office of AG (Audit II), Nagpur conducts audit of accounts of certain Central Public Sector Undertaking, statutory corporations, autonomous organisations and collects fees from them for the same.

"Since the issue has all India ramifications, the same is brought to your notice for further necessary action at your end," the letter concluded.