New Delhi Mar 11: Comptroller and Auditor General (CAG) of India has pointed out that units under domestic tariff area (DTA) have been put in a disadvantageous position with units based in special economic zones (SEZs) selling products in the DTA market.

The CAG, in its latest performance audit report on indirect taxes released today, held that in case where there is "nil" excise duty in DTA, SEZ units have been selling manufactured items and no provision has been made to recover duty foregone on inputs procured by the SEZ units. The report mentions distortions in 22 units out of the 550 units audited for the report.

The CAG has pointed out that the revenue implication of the audit review of SEZs is Rs 247 crore. An additional Rs 1,725 crore was foregone or could not be recovered in the absence of enabling provisions.

The report also pointed out that as the SEZ schemes relies mainly on self-certification and does not require regular performance reports and other statutory documents, some units have been providing inconsistent data. The CAG has asked the government to address this concern.