The Comptroller and Auditor General (CAG) on Tuesday flagged widespread errors and omissions in income tax assessments resulting in a potential tax loss of Rs 5,728.8 crore to the exchequer.

The CAG also flagged that despite repeated recommendations and clear statutory obligations, the government had failed to submit last four years' goods and services tax compensation fund accounts for audit and asked it to urgently address the lapse. The national statutory auditor also highlighted significant tax evasion in the distilleries and breweries sector, which led to a revenue loss of Rs 12,781 crore.

The CAG's report, tabled in Parliament, contained 504 audit observations with a tax effect of Rs 5,728.8 crore pertaining to errors in levy of interest, irregularities in allowing depreciation, incorrect allowance of business expenditure, unexplained investment or cash credit and arithmetical errors in the computation of income and tax.