APL - Excise and Service Tax - Final - 03-17

Private & Confidential
Internal Audit Report
Ajanta Pharma Limited

Excise and Service Tax
20th April, 2017

APL / Excise & Service Tax /Apr-16 to Dec- 16 1
Chartered
Mahajan & Aibara Accountants
LLP
1, CHAWLA HOUSE, 62, WODEHOUSE ROAD,
COLABA, MUMBAI - 400 005.
TEL: +91-22-2218 2843 FAX: +91-22-2218 8445
Email: admin@mahajanaibara.com website: www.mahajanaibara.com
Private & Confidential
20th April, 2017
Mr. Anand Joshi

Ajanta Pharma Ltd.
Ajanta House, Charkop,
Kandivali (West), Mumbai 400 067
Dear Sir,
Internal Audit Report On Review Of Excise and Service Tax
We have completed our review of Excise & Service Tax for Ajanta Pharma Ltd. Our observation and recommendations
which have been discussed with the process owners are attached herewith. This report also incorporates the replies received in
response to our draft report dated 16th March 2017 on the same subject.
We appreciate the co-operation and assistance provided to us during the course of this review. We would be pleased to discuss
and clarify on any aspect of our review procedures or this report with you at your convenience.
Yours faithfully,
Mahajan & Aibara
______________________________________________________________________________________________________________________________________________
Table of Contents
Scope and Coverage 04
Key Statistics 05
Executive Summary 06 - 07
Detailed Observation 08 - 16
Exhibits 17 - 22

Scope and Coverage
Scope Audit Approach

Excise & service tax Our audit approach mainly involved the following work steps:
Compliance with the provisions of excise & service tax laws Checking with the compliance with the provisions of the Acts
at various plants & rules thereof as applicable to the applicable.
company. Check whether proper documentation is maintained as required by
Review of cenvat availability and availment & utilization Acts.
Liability working & payment Reviewing the organization structure and compliance process in
terms of its adequacy.
Timely filing to returns
Reconciliation with accounting & returns

Audit Team
Coverage & Period Mr. Vikas Agarwal
Mr. Aashish Dhavde

April to December 2016. HO and visit to Paithan &
Chikalthana Plant Mr. Yogendra Gour

Key Statistics: For The Period April 2016 to Dec 2016
Summary of CENVAT Credit /PLA Availability & Utilization
for Chikalthana & Paithan Plants
(Amt in Rs. Lakhs)
Excise Credit Service Tax Credit PLA

Month
Opening Input Utilised Closing Opening Input Utilised Closing Opening Input Utilised Closing
Apr-16 197.64 170.22 238.22 129.64 114.90 7.39 65.00 57.29 0.02 0.08 0.08 0.02
May-16 129.64 156.49 97.85 188.29 57.29 121.19 68.90 109.58 0.02 - - 0.02
Jun-16 188.29 133.64 101.36 220.57 109.58 231.52 235.56 105.55 0.02 0.13 0.13 0.02
Jul-16 220.57 109.41 28.61 301.37 105.55 208.68 110.64 203.58 0.02 0.13 0.13 0.02
Aug-16 301.37 76.55 55.04 322.88 203.58 22.03 195.37 30.24 0.02 0.17 0.17 0.02
Sep-16 322.88 92.10 180.70 234.28 30.24 136.98 112.08 55.14 0.02 0.13 0.13 0.02
Oct-16 234.28 121.43 31.39 324.31 55.14 123.62 109.72 69.04 0.02 0.12 0.12 0.02
Nov-16 324.31 257.61 99.72 482.20 69.04 135.06 171.12 32.97 0.02 0.18 0.18 0.02
Dec-16 482.20 88.99 169.01 402.18 32.97 15.71 20.63 28.05 0.02 0.12 0.12 0.02
Total 2,401.19 1,206.44 1,001.90 2,605.73 778.28 1,002.19 1,089.03 691.44 0.19 1.05 1.05 0.19

Executive Summary: Excise and Service Tax (1/2)
Define Comprehensive Checklist For Excise / Service Tax Compliance (Slide 9)
1. Document comprehensive checklist for various provisions applicable to Plants/HO under Excise & Service Tax laws and monitor its
compliances on periodic basis
Action Plan: Checklist will be maintained and implemented as suggested. (Gopal Rathi - AVP Excise & Stores; 31st May, 2017)
Rectify Calculation of Turnover for Input Service Tax Distribution (Slide 11)
2. There is need to review the logic adopted by Indirect Tax department. in computing Turnover for Input Service Distributor (ISD) i.e.
distribution of tax credit across various manufacturing locations. Currently, Sales return value and its provision are reduced from FG sales
resulting in duplication and Sales Assessable value is considered inclusive of Excise Duty resulting in loss of credit to extent of Excise
Duty included in Trading Sales/Margin percentage.
3. Wrong calculation of turnover ratio during Apr to Nov16 resulted in higher reversal of tax credit by Rs.6 lakhs (i.e. Rs.9 lakhs p. a.)
towards Trading Sales
Action Plan: We will rectify calculation considering AV and Sales return provisions from 2017-18. Correction of higher reversal is being
evaluated with excise head. (Satyendra Pandey - Sr. Executive Accounts; 31st May, 2017)
Improve Process on Service Tax Credit Availment (Slide 12 & 13)
4. Define checklist for Service tax credit eligibility on major services considering nature of spends after taking expert opinion. Sample review
showed tax credit availed for expenses like Civil /construction related services, Vehicle hire, Outward Freight etc.
5. Introduce review of tax credit availed on invoices unpaid for more than 3 months and pass reversal entries as applicable. Observed
CENVAT credit not reversed although bills were paid after 3 months from date of invoice. As per rule 4(7) if payment not made respect of
credit taken invoice for 3 months from date of invoice than amount equal to CENVAT taken need to pay.
Action Plan: Checklist will be maintained and implemented as suggested.
From Jan-17, process revised where CENVAT credit file is pre-reviewed by CWH team and Plant will take credit after receipt of approval,.
Process to reverse tax credit on unpaid invoices will be defined. (Gopal Rathi - AVP Excise & Stores; 31st May 2017)

Executive Summary: Excise and Service Tax (2/2)
Improve Monitoring of Purchases Under Concessional Rate Scheme (Form I) (Slide 14)
6. There is need to review tracker maintained for Form I utilisation status & identify unutilized balance available to optimize purchase without
payment of duty. Existing tracker does not capture unutilised amount available nor reasons are captured for purchases done without Form
I. Currently, Paithan plant is procuring input material without payment of duty under Concessional Rate of Duty scheme i.e. Form I.
Random review shows overutilization of one Form I by Rs.13K.
7. Report on unutilized Form I is not shared periodically (say monthly) with Procurement team to facilitate raising PO with reference to
Concessional scheme. Review showed 4 instances where purchases were involving duty payment of Rs.43K. Informed this was due to
PO being created without specifying such purchases are done against Form I.
8. Explore possibility of configuring PO creation module to include Purchase against Concessional form as default option to minimize
manual intervention.
Action Plan: Tracker will be improved as suggested. PO configuration will be evaluated in SAP. (Gopal Rathi - AVP Excise & Stores; 31st
May, 2017)

Detailed Observations

Define Comprehensive Checklist For Excise / Service Tax Compliance (1/2)
Observation Risk & Impact Recommendation & Action Plan

Issue Risk and Impact Recommendation
There is a need to document comprehensive Technical or substantive Define comprehensive checklist for Excise &
checklist for various provisions applicable to violation committed Service Tax. covering applicable provisions,
Plants/HO under Excise & Service Tax laws and inadvertently may remain service eligible for tax credit, extent of eligibility,
monitor its compliances on periodic basis. undetected. etc.
Some critical provisions that can be included in
checklist are given in next slide: Action Plan
Root Cause
The above weakness has led to gaps in tax Checklist Will be maintained and implemented
Absence of documented
credit availment as highlighted in subsequent as suggested.
checklist for Excise &
slides.
Service Tax. Person Responsible: Gopal Rathi - AVP Excise &
Stores
Timeline: 31st May, 2017

Define Comprehensive Checklist For Excise / Service Tax Compliance (2/2)
Excise Duty Service Tax (Cenvat)

Excise liability is booked on all excisable sales made during the Services procured on which Reverse charge mechanism is
month. applicable
Excise liability is reversed in case excisable goods are returned in Payment of Service Tax on all input services on reverse charge is
factory applicable & credit only on payment of invoices.
Payment of Excise liability through PLA is after utilization of all Discharge of Service tax liability (reverse charge basis) on or before
Cenvat credit available on Input, Capital goods & input services. due date.
Reconciliation of overall Raw material purchase whether Cenvat Approval/Maker- Checker for Service tax return.
booked or purchased under advance license.
Reconciliation of other purchases whether Cenvat available or Approval procedure /matrix for Payment /deposit in PLA.
purchased from trader on which excisable invoice not provided.
Timely filing of statutory returns such as ER-1, ER-6 etc. Input service tax distribution Turnover calculation
Timely payment of excise duty. Input service tax distribution Billing & distribution
Approval/Maker- Checker for excise return Reconciliation of Cenvat receivable ledger
Approval procedure /matrix for Payment /deposit in PLA Review of Non claimable Cenvat paid ledger

Rectify Calculation of Turnover for Input Service Tax Distribution
Observation Risk &Impact Recommendation & Action Plan

Issue Risk & Impact Recommendation
There is need to review the logic adopted by Indirect Loss of CENVAT credit Revise logic of Turnover calculation for
Tax department. in computing Turnover for Input of Rs.6 lakhs (Rs.9 Input service tax distribution and align with
Service Distributor (ISD) i.e. distribution of tax credit lakhs p.a.). CENVAT credit rules.
across various manufacturing locations.
Pass rectification entries for higher tax
Review showed need to revise the logic for Turnover credit reversed after taking expert opinion.
Root Cause
computation considering below:
Turnover ratio not
Currently, Net FG Sales (i.e. Sales less returns) are
computed according to Action Plan
further reduced by Provision for Sales return
law. We will rectify calculation considering AV
(Trading and FG) resulting in duplication.
and Sales return provisions from 2017-18.
FG Sales value is considered inclusive of Excise Correction of higher reversal is being
duty for calculating Trading Margin % on Turnover evaluated with excise head.
instead of assessable value i.e. sales value without
excise duty. Person Responsible: Satyendra Pandey -
Sr. Executive Accounts
Wrong calculation of turnover ratio during Apr to
Nov16 resulted in higher reversal of tax credit by Timeline: 31st May, 2017
Rs.6 lakhs (i.e. Rs.9 lakhs p. a.) towards Trading
Sales. (Exhibit 1)

Improve Process on Service Tax Credit Availment (1/2)
Observation Risk &Impact

Issue Risk & Impact
Process of availing CENVAT credit needs to improved by defining nature of expenses on which credit Excess CENVAT credit
can be availed, ineligible, etc. Review showed CENVAT credit availed on certain services for which availed.
expert opinion needs to be obtained w.r.t. eligibility for credit.
Non-adherence to
Head Office provisions of law.
CENVAT credit availed on Construction services. (Exhibit 2) Penalty / Interest for
Tax credit availed for service tax paid for Outward freight from Place of removal to distributors / excess credit taken.
customers Place.
Paithan and Chikalthana Plants Root Cause
Currently, Excise Team of plants takes credit according to their knowledge and experience. During Apr No defined checklist for
to Nov16, random review showed CENVAT credit was availed by Plant on expenses like Vehicle Hire Service tax availed on
charges, Building Construction charges, etc. (Detail has been provided) ineligible expenses.
Tax Credit on Unpaid Invoices Process to reverse tax
There is need to review/reverse tax credit availed on Invoices unpaid for more than 3 months. During credit on unpaid invoices
Apr to Oct16, observed CENVAT credit was not reversed although bills were paid after 3 months from not defined.
date of invoice. (Exhibit 3)
According to Rule 4(7) - CENVAT credit in respect of input service shall be allowed on or after the day
on which the invoice/bill/challan is received. If the payment of the value of input services and the
service tax payable as indicated in the invoice, is not made within 3 months of such document date, the
manufacturer or the service provider who has taken credit on such input services, shall pay an amount
equal to CENVAT credit availed on such input service except the service tax paid as recipient of
service.

Improve Process on Service Tax Credit Availment (2/2)
Recommendation & Action Plan

Recommendation
Define checklist for Service tax credit eligibility on major services considering nature of spends after taking expert opinion.
Review Service Tax Receivable GL on periodic basis (say quarterly) to identify credit availed on ineligible services and pass reversal
entries accordingly.
Introduce review of tax credit availed on invoices unpaid for more than 3 months and pass reversal entries as applicable.
Action Plan
Checklist will be maintained and implemented as suggested.
From Jan-17, process revised where CENVAT credit file is pre-reviewed by CWH team and Plant will take credit after receipt of approval.
Process to reverse tax credit on unpaid invoices will be defined.
Person Responsible: Gopal Rathi - AVP Excise & Stores
Timeline: 31st May, 2017

Improve Monitoring of Purchases Under Concessional Rate Scheme (Form I)
Observation Risk & Impact Recommendation & Action Plan

Issue Risk and Impact Recommendation
Process of monitoring unutilized balance in Form I under Concessional Review tracker to identify unutilized
concessional rate of duty scheme needs improvement. benefit not utilized balance available in each Form I to
resulting into optimize purchase on payment of
Currently, Paithan plant is procuring input material without payment
purchases done duty.
of duty under Concessional Rate of Duty scheme. An excel tracker
against duty
is maintained by Central Warehouse team capturing amount Share monthly report on unutilized
payment
eligible & utilised for actual purchases without duty. However, no Form I with Procurement team to
review is performed for unutilised amount nor reasons captured for Cash outflow for facilitate raising PO with reference
purchases done without Form I or report on pending Form I and duty payment. to Concessional scheme.
unutilized amount is shared with Procurement team. Explore possibility of configuring PO
Review of such tracker maintained showed following creation module to include
discrepancies: Purchase against Concessional
form as default option to minimize
Random review showed Form I taken for Borkar Packaging Pvt
Root Cause manual intervention.
Ltd (PTN/12/16-17) was over-utilised whereby higher quantity of
13K was procured than approved. (Exhibit 4) PO created
Observed in 4 instances (out of 30 samples), procurement of without including Action Plan
7.1 lakhs quantity was done by duty payment of Rs.43K instead clause for
Tracker will be improved as
of utilising Form I (Exhibit 5). Reasons for sourcing with duty purchasing under
suggested. PO configuration will be
payment instead of concessional scheme were not readily concessional
evaluated in SAP.
available nor captured in tracker. This resulted in cash outflow scheme.
although CENVAT credit would be availed for such duty paid Person Responsible: Gopal Rathi -
Operational
Informed this was due to PO being created without specifying AVP Excise & Stores
deficiency
such purchases are done against Form I. Timeline: 31st May, 2017

Other Observations (1/2)
Observation Risk & Impact

Issue Risk and Impact
Excess Tax Paid on Director Fees Excess Payment of Tax.
Random review showed excess service tax of Rs.1.6 lakhs was paid under Reverse Charge Loss of Tax credit.
Mechanism (RCM) on Director Sitting fees in Aug -2016. Incorrect accounting practices.
Strengthens Control on Tax Credit Transfer
Expenses are incurred at R&D Office and HO for Paithan / Chikalthana / Waluj plant. Generally, Root Cause
tax credits of expenses at these office locations are transferred to respective plant. Random
review showed expenses of Rs.10.36 Lakhs incurred for these Plants were distributed among Operational deficiency
all plants instead of allocating to these respective Plants. This lead to loss of tax credit of
Rs.73K i.e. ~7% attributable to ratio of Trading Sales in Input Credit distribution. (Exhibit 6)
Improve Accounting of Service Tax
During April 2016 to November 2016, rectification/reversal entries of Rs.15.15 lakhs were
passed in Service Tax Receivable GL (Detail has been provided). Although these entries have
been passed by authorized personnel, high volume of rectification entries indicate need to
improve logic/tests applied for availing tax credit.
Further, no entries are passed towards ineligible tax credit identified during review of Service
Tax Receivable GL. Though separate ledger is created for non-eligible CENVAT credit, no
entries are passed in this account during Apr16 to Jan17. E.g. Service tax paid under RCM for
vehicle hire charges was not accounted in this GL

Other Observations (2/2)
Recommendation & Action Plan

Recommendation
Exercise greater care for tax payment under RCM and evaluate configuring tax structure in SAP system to avoid manual errors.
Instruct Tax team to allocate expenses of specific Plant to respective Plants without allocating across Units to avoid loss of tax credit.
Consider review of rectification entries passed in Tax Receivable GL and initiate corrective action to minimize errors in posting entries.
Improve visibility on ineligible tax credit by posting entries in relevant GL.
Action Plan
We had excess paid & Taken credit. We will take care in future to avoid excess payment.
Max. Instances mentioned in exhibits are for Sales Commission. We will instruct team to take credit in account of specific plant if clearly
mentioned in invoice.
We dont have rights of edit /reversal in current system. We will consider this point post implementation of SAP.
We will instruct team to pass entry of ineligible ST paid through relevant GL.
Person Responsible: Satyendra Pandey - Sr. Executive Accounts
Timeline: 31st May 2017

Exhibit 1: Summary Of Input Credit Service Distribution - HO & R&D
(Amt in Rs.)
May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Total as per Total as per
Location Particulars Difference
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 M&A Working APL Working
Service Tax paid 12,764,822 10,182,570 8,909,479 10,820,123 7,307,465 9,105,843 7,560,055 7,956,734 74,607,091 74,607,091 -
HO Less: reversal of trading margin (908,863) (725,005) (634,360) (770,399) (520,296) (648,342) (538,280) (566,524) (5,312,070) (5,687,519) 375,449
Total Service Tax Available For Transfer 11,855,959 9,457,565 8,275,119 10,049,724 6,787,169 8,457,501 7,021,774 7,390,210 69,295,021 68,919,571 375,449
Service Tax paid 3,871,949 3,352,827 5,429,185 5,088,401 6,406,950 4,553,456 4,485,220 2,932,200 36,120,188 36,120,188 -
R&D Advent Less: reversal of trading margin (275,685) (238,723) (386,561) (362,297) (456,179) (324,209) (319,350) (208,774) (2,571,779) (2,753,549) 181,770
Total Service Tax Available For Transfer 3,596,264 3,114,104 5,042,624 4,726,104 5,950,771 4,229,247 4,165,870 2,723,426 33,548,409 33,366,639 181,770
Service Tax paid 151,321 174,280 234,675 365,436 284,768 205,523 258,652 270,560 1,945,215 1,945,215 -
Plt 24 Less: reversal of trading margin (10,774) (12,409) (16,709) (26,019) (20,276) (14,633) (18,416) (19,264) (138,501) (148,290) 9,789
Total Service Tax Available For Transfer 140,547 161,871 217,966 339,417 264,492 190,890 240,236 251,296 1,806,715 1,796,926 9,789
Service Tax paid 365,974 286,175 272,806 381,429 372,159 322,553 280,137 335,502 2,616,735 2,616,735 -
Service Tax paid 87,705 108,664 186,576 31,950 35,356 36,959 33,987 115,568 636,765 636,765 -
Total Service Tax Available For Transfer 81,460 100,927 173,292 29,675 32,839 34,327 31,567 107,339 591,427 588,223 3,204
Service Tax paid 675 100,136 144,265 35,384 72,339 123,735 159,959 104,719 741,212 741,212 -
Plt 149 Less: reversal of trading margin (48) (7,130) (10,272) (2,519) (5,151) (8,810) (11,389) (7,456) (52,775) (56,505) 3,730
Total Service Tax Available For Transfer 627 93,006 133,993 32,865 67,188 114,925 148,570 97,263 688,437 684,707 3,730
Service Tax paid 158,836 207,405 175,441 189,478 284,690 225,775 179,749 201,988 1,623,362 1,623,362 -
7,955 7,955 7,955 -
Plt 33 (566) (566) (606) 40
7,389 7,389 7,349 40
Total Excess Credit Reversal for Trading Sale 595,320
Total Short Credit Distributed to Plants 595,320

Exhibit 2: Service Tax Credit Taken for Civil Work / Construction Related Work
(Amt in Rs)
Document Document Credit A/c Group Anl
Document Date A/c Code Remarks A/c Description Entry Type A/c Code Adm Description
Series Code No. Amount Code Description
FINPTN 334 4/28/2016 0:00 GA011003 9,607 Service Tax Rec-Bill Bc/15-16/79 08/03/1 CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 550 5/12/2016 0:00 GA011003 32,670 Service Tax Rec-Bill Bc/78 Ra-1St 08/03/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 986 6/8/2016 0:00 GA011003 10,431 Service Tax Rec-Bill 50 18/04/16 Rrno :2 CWIP BUILDING -PAITHAN PU 1S00712661 Sai Shraddha Enterprises GL050108 Projects
FINPTN 987 6/8/2016 0:00 GA011003 35,130 Service Tax Rec-Bill Bc/02/Ra-1St 09/04/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 1036 6/13/2016 0:00 GA011003 28,769 Service Tax Rec-Bill Bc/1617/01/Ra-7 09/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 1051 6/14/2016 0:00 GA011003 1,537 Service Tax Rec-Bill Ssc/Apl/02 05/05/16 CWIP BUILDING -PAITHAN PU 1S00712704 Shree Sai Coating. GL050108 Projects
FINPTN 2583 9/12/2016 0:00 GA011003 40,937 Service Tax Rec-Bill Bc/16-17/03 Ra1 02/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FICTGN 1270 10/13/2016 0:00 GA011003 5,737 Service Tax Rec-Bill 60 24/07/16 Rrno :8 CWIP BUILDING -PAITHAN PU 1S00712661 Sai Shraddha Enterprises GL050108 Projects
FINPTN 3220 10/24/2016 0:00 GA011003 4,943 Service Tax Rec-Bill 90 06/10/16 Rrno :3 CWIP BUILDING -PAITHAN PU 1L00000143 Laxmi Fabrication Works GL050108 Projects
FINPTN 3468 11/10/2016 0:00 GA011003 1,899 Service Tax Rec-Bill 207 12/10/16 Rrno : CWIP BUILDING -PAITHAN PU 1D00000547 Deepa Interior GL050108 Projects
FINPTN 3471 11/10/2016 0:00 GA011003 1,015 Service Tax Rec-Bill 209 12/10/16 Rrno : CWIP BUILDING -PAITHAN PU 1D00000547 Deepa Interior GL050108 Projects
FINPTN 3472 11/10/2016 0:00 GA011003 147 Service Tax Rec-Bill 210 12/10/16 Rrno : CWIP BUILDING -PAITHAN PU 1D00000547 Deepa Interior GL050108 Projects
FINPTN 3751 11/26/2016 0:00 GA011003 69,134 Service Tax Rec-Bill Bc/16-17/30-Ra2 28/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 3828 11/30/2016 0:00 GA011003 4,813 Service Tax Rec-Bill Bc/16-17/32/Ra1 07/ CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 3829 11/30/2016 0:00 GA011003 59,500 Service Tax Rec-Bill Ngk/Ajanta/351 15/1 CWIP BUILDING -PAITHAN PU 1N00000377 N.G. Karkhane.. GL050108 Projects
FINPTN 3892 12/8/2016 0:00 GA011003 8,707 Service Tax Rec-Bill Bc/1617/31/Ra1 07/1 CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINPTN 3893 12/8/2016 0:00 GA011003 11,781 Service Tax Rec-Bill Bc/1617/33/Ra9 13/1 CWIP BUILDING -PAITHAN PU 1B00000383 Bharuka Constructions GL050108 Projects
FINNHO 1 5/19/2016 0:00 FIN0001057 54,600 Service Tax Rec-Bill Ba/Apl/160503 03/05 CWIP BUILDING ANDHERI PU 1B00000583 Bhavsar & Associates GL050108 Projects
FINNHO 2 6/22/2016 0:00 FIN0001057 90,300 Service Tax Rec-Bill Npapl/Apl-016 26/05 CWIP BUILDING ANDHERI PU 1N00000428 Niteen Parulekar Architects PvtGL050108
Ltd Projects
FINNHO 3 6/27/2016 0:00 FIN0001057 14,119 Service Tax Rec-Bill Gg/06/Bl/122 16/06/ CWIP BUILDING ANDHERI PU 1G00000495 Global Geotechnics. GL050108 Projects
FINNHO 4 6/30/2016 0:00 FIN0001057 26,617 Service Tax Rec-Bill Z 1617-I 51B 19/06/ CWIP BUILDING ANDHERI PU 1Z00000083 Zenith GL050108 Projects
FINNHO 5 7/29/2016 0:00 FIN0001057 1,148 Service Tax Rec-Bill Gg/07/Bl/149 02/07/ CWIP BUILDING ANDHERI PU 1G00000495 Global Geotechnics. GL050108 Projects
FICTGN 877 8/17/2016 0:00 FIN0000053 980 Service Tax Rec-Bill 26 21/07/16 Rrno :7 CWIP BUILDING -CHITTEGAON PU 1S00712704 Shree Sai Coating. GL050108 Projects
FICTGN 878 8/17/2016 0:00 FIN0000053 6,614 Service Tax Rec-Bill 12 18/06/16 Rrno :5 CWIP BUILDING -CHITTEGAON PU 1S00712704 Shree Sai Coating. GL050108 Projects
FICTGN 945 8/26/2016 0:00 FIN0000053 2,200 Service Tax Rec-Bill 136 08/08/16 Rrno : CWIP BUILDING -CHITTEGAON PU 1D00000547 Deepa Interior GL050108 Projects
FICTGN 950 8/26/2016 0:00 FIN0000053 437 Service Tax Rec-Bill Ssc/Apl/27 26/07/16 CWIP BUILDING -CHITTEGAON PU 1S00712704 Shree Sai Coating. GL050108 Projects
FICTGN 952 8/26/2016 0:00 FIN0000053 2,623 Service Tax Rec-Bill Ssc/Apl/23 19/07/16 CWIP BUILDING -CHITTEGAON PU 1S00712704 Shree Sai Coating. GL050108 Projects
FICTGN 1101 9/16/2016 0:00 FIN0000053 10,735 Service Tax Rec-Bill 9 11/07/16 Rrno :71 CWIP BUILDING -CHITTEGAON PU 1S00712291 S.R. Kakade GL050108 Projects
FICTGN 1195 9/27/2016 0:00 FIN0000053 4,262 Service Tax Rec-Bill 21 19/08/16 Rrno :1 CWIP BUILDING -CHITTEGAON PU 1S00712291 S.R. Kakade GL050108 Projects
Total 644,171

Exhibit 3: Non-Reversal of CENVAT Credit for Unpaid / Delay Payment to Service Provider
(April- Oct 2016)
(Amt n Rs)
Value of Delay in Credit Taken in
Document Document Doument Amt of Document Document Cheque Credit ST Paid Under
Party Name Invoice No. Invoice Dt. Service Distribution Service Cheque No. Payment Same Month of
No. No. Date Distribution No. No. Date Taken Date RCM
Provided (Days) Payment
FINPTN-2344 FINPTN/2344 27-Aug-16 Cubic Computing (P) Ltd 2792 13-Aug-16 Cwip Computer Software - Ptn 1,733,490 235,620 FIDB2P-5074 FIDB2P/5074 552694 14-Nov-16 27-Aug-16 93 No No
FICTGN-947 FICTGN/947 26-Aug-16 Cool Care Engineers 059 23-Jun-16 Office Equipments - Chittegaon 515,216 71,416 FIDB2P-4736 FIDB2P/4736 493995 26-Oct-16 26-Aug-16 125 No No
FICTGN-1268 FICTGN/1268 13-Oct-16 Tsa Process Equipment Pvt. Ltd. LAB/TSA/035 31-Aug-16 Cwip Plant & Machinery-Chittegaon 251,975 34,927 FIDB2P-5763 FIDB2P/5763 553140 14-Dec-16 13-Oct-16 105 No No
FINHO-248 FINHO/248 29-Apr-16 Sproxil Brand Protection Solutions Pvt.L 192/246 15-Mar-16 Purchase Of Packing Materials Local 342,282 21,280 FINSBP-804 FINSBP/804 165110 14-Jun-16 29-Apr-16 91 No No
FINEXP-2382 FINEXP/2382 13-Jul-16 The Indian Hotels Co. Ltd. 3151706033 1-Apr-16 Membership And Subscription 150,750 21,000 FINSBP-1206 FINSBP/1206 165322 19-Jul-16 13-Jul-16 109 No No
FINEXP-5485 FINEXP/5485 28-Oct-16 Cox & Kings Ltd. 240122747 31-Aug-16 Sales Conference Meetings & Seminars 461,475 19,324 FIDB2P-5729 FIDB2P/5729 553111 13-Dec-16 28-Oct-16 104 No No
FINEXP-4216 FINEXP/4216 16-Sep-16 A.C Surgi Pharma Pvt.Limited DRNO.AC/AJA/38A 1-Apr-16 Sales Commission 138,212 19,253 FIDB2P-3946 FIDB2P/3946 493494 20-Sep-16 16-Sep-16 172 No No
FINHO-255 FINHO/255 29-Apr-16 Sproxil Brand Protection Solutions Pvt.L 164/207 18-Feb-16 Purchase Of Packing Materials Local 216,180 13,440 FINSBP-804 FINSBP/804 165110 14-Jun-16 29-Apr-16 117 No No
FINEXP-4370 FINEXP/4370 21-Sep-16 Overnite Express Limited BILLS-MAY.16 31-May-16 Courier Expenses 91,887 12,799 FIDB2P-4005 FIDB2P/4005 493533 22-Sep-16 21-Sep-16 114 No No
FINEXP-4326 FINEXP/4326 20-Sep-16 A.C Surgi Pharma Pvt.Limited DR No.107 7-Apr-16 Sales Commission 86,110 11,995 FIDB2P-3955 FIDB2P/3955 493503 21-Sep-16 20-Sep-16 167 No No
FINEXP-2315 FINEXP/2315 11-Jul-16 Aspirations Unlimited 02/16-17 6-Apr-16 Recruitment Expenses 48,878 6,809 FIDB2P-2384 FIDB2P/2384 492475 14-Jul-16 11-Jul-16 99 No No
FINEXP-2316 FINEXP/2316 11-Jul-16 Aspirations Unlimited 01/16-17 6-Apr-16 Recruitment Expenses 48,878 6,809 FIDB2P-2384 FIDB2P/2384 492475 14-Jul-16 11-Jul-16 99 No No
FINPTN-1685 FINPTN/1685 21-Jul-16 Laxmi Fabrication Works 18 26-Jun-16 Repairs To Building 47,668 6,607 FIDB2P-4303 FIDB2P/4303 493735 4-Oct-16 21-Jul-16 100 No No
FINEXP-4451 FINEXP/4451 23-Sep-16 Skylink Freight India Pvt Ltd SEA/16-17/320 22-Jun-16 Clearing & Forwarding Charges On Exports 43,407 6,016 FINYBP-2902 FINYBP/2902 237142 30-Sep-16 23-Sep-16 100 No No
FINEXP-4322 FINEXP/4322 20-Sep-16 A.C Surgi Pharma Pvt.Limited DRNO.110 7-Apr-16 Sales Commission 37,803 5,266 FIDB2P-3955 FIDB2P/3955 493503 21-Sep-16 20-Sep-16 167 No No
FINEXP-956 FINEXP/956 19-May-16 Tata Communications Ltd 224475150914 14-Sep-15 Telephone Expenses 35,000 4,900 FINSBP-510 FINSBP/510 164979 20-May-16 19-May-16 249 No No
FINEXP-144 FINEXP/144 20-Apr-16 Cute Solutions AMR 078 - 2016 9-Jan-16 Recruitment Expenses 32,598 4,541 FIDB2P-416 FIDB2P/416 491107 22-Apr-16 20-Apr-16 104 No No
FINEXP-4733 FINEXP/4733 30-Sep-16 Fedex Express Tscs (I) Pvt. Ltd. 62251 26-May-16 Carriage Outward 32,374 4,487 FIDB2P-5659 FIDB2P/5659 553060 8-Dec-16 30-Sep-16 196 No No
FINEXP-4218 FINEXP/4218 16-Sep-16 A.C Surgi Pharma Pvt.Limited DRNO.AC/AJA/115 1-Apr-16 Sales Commission 30,456 4,243 FIDB2P-3946 FIDB2P/3946 493494 20-Sep-16 16-Sep-16 172 No No
FINHO-2002 FINHO/2002 25-Aug-16 Pharmasecure Product Authenticatio India 121/122 2-Jun-16 Purchase Of Packing Materials Local 53,315 3,796 FINRBP-1575 FINRBP/1575 003905 13-Sep-16 25-Aug-16 103 No No
FINEXP-4735 FINEXP/4735 30-Sep-16 Fedex Express Tscs (I) Pvt. Ltd. 26556 28-Jun-16 Carriage Outward 25,045 3,472 FIDB2P-5659 FIDB2P/5659 553060 8-Dec-16 30-Sep-16 163 No No
FINHO-1862 FINHO/1862 12-Aug-16 Pharmasecure Product Authenticatio India 133/134 10-Jun-16 Purchase Of Packing Materials Local 45,679 3,252 FINRBP-1575 FINRBP/1575 003905 13-Sep-16 12-Aug-16 95 No No
FINEXP-4219 FINEXP/4219 16-Sep-16 A.C Surgi Pharma Pvt.Limited DR No.112 1-Apr-16 Sales Commission 21,891 3,049 FIDB2P-3946 FIDB2P/3946 493494 20-Sep-16 16-Sep-16 172 No No
FINEXP-3947 FINEXP/3947 7-Sep-16 A.C Surgi Pharma Pvt.Limited DR No.28 3-Jun-16 Sales Commission 21,404 2,967 FIDB2P-3705 FIDB2P/3705 493346 8-Sep-16 7-Sep-16 97 No No
FINEXP-956 FINEXP/956 19-May-16 Tata Communications Ltd 224475150914 14-Sep-15 Telephone Expenses 37,050 2,850 FINSBP-510 FINSBP/510 164979 20-May-16 19-May-16 249 No No
FINEXP-2596 FINEXP/2596 22-Jul-16 Jyoti Graphics 009/16-17 11-Apr-16 Artwork Charges 20,050 2,793 FIDB2P-2571 FIDB2P/2571 492574 25-Jul-16 22-Jul-16 105 No No
FINHO-422 FINHO/422 11-May-16 Sproxil Brand Protection Solutions Pvt.L 185/238 10-Mar-16 Purchase Of Packing Materials Local 42,552 2,688 FINSBP-804 FINSBP/804 165110 14-Jun-16 11-May-16 96 No No
FICTGN-435 FICTGN/435 8-Jun-16 Ahs Techno 02 2-Apr-16 Repairs To Building 18,661 2,600 FIDB2P-2670 FIDB2P/2670 492645 28-Jul-16 8-Jun-16 117 No No
FINPTN-1684 FINPTN/1684 21-Jul-16 Laxmi Fabrication Works 19 26-Jun-16 Repairs To Building 18,559 2,572 FIDB2P-4303 FIDB2P/4303 493735 4-Oct-16 21-Jul-16 100 No No
FINEXP-4734 FINEXP/4734 30-Sep-16 Fedex Express Tscs (I) Pvt. Ltd. 98446 26-Apr-16 Carriage Outward 15,017 2,081 FIDB2P-5659 FIDB2P/5659 553060 8-Dec-16 30-Sep-16 226 No No
FINEXP-3946 FINEXP/3946 7-Sep-16 A.C Surgi Pharma Pvt.Limited DR NO.27 20-May-16 Sales Commission 14,185 1,976 FIDB2P-3705 FIDB2P/3705 493346 8-Sep-16 7-Sep-16 111 No No
FINEXP-4017 FINEXP/4017 9-Sep-16 Card Icici 4864 1000 3798 7000 ILKWQZ 19-Aug-16 Rajesh M Agrawal(T) 22,305 1,791 FIDB2P-5769 FIDB2P/5769 B0205769 14-Dec-16 9-Sep-16 117 No No
FINHO-812 FINHO/812 8-Jun-16 Hathway Cable And Datacom Ltd 33588687 14-Mar-16 Telephone Expenses 12,239 1,702 FIDB2P-1688 FIDB2P/1688 491990 15-Jun-16 8-Jun-16 93 No No
FINHO-1462 FINHO/1462 19-Jul-16 Hathway Cable And Datacom Ltd 30166567 10-Sep-15 Telephone Expenses 12,152 1,701 FIDB2P-2504 FIDB2P/2504 492536 21-Jul-16 19-Jul-16 315 No No
FINPTN-1051 FINPTN/1051 14-Jun-16 Shree Sai Coating. SSC/APL/02 5-May-16 Cwip Building -Paithan 11,032 1,537 FIDB2P-3825 FIDB2P/3825 493429 15-Sep-16 14-Jun-16 133 No No
FINEXP-4217 FINEXP/4217 16-Sep-16 A.C Surgi Pharma Pvt.Limited DRNO.AC/AJA/114 1-Apr-16 Sales Commission 10,846 1,511 FIDB2P-3946 FIDB2P/3946 493494 20-Sep-16 16-Sep-16 172 No No
FINHO-389 FINHO/389 9-May-16 Xpress Computers Ltd. LIVE/0636 7-Jan-16 Repairs To Computers 8,542 1,190 FIDB2P-915 FIDB2P/915 491482 12-May-16 9-May-16 126 No No
FINEXP-4894 FINEXP/4894 10-Oct-16 V-Xpress 10663 30-Jun-16 Carriage Outward 7,020 973 FIDB2P-4514 FIDB2P/4514 493882 13-Oct-16 10-Oct-16 105 No No
FINEXP-5374 FINEXP/5374 26-Oct-16 Uhm Vacation Pvt Ltd HS/883 11-Jul-16 Sales Expenses 82,791 850 FINSBP-2329 FINSBP/2329 165901 28-Oct-16 26-Oct-16 109 No No
FINTE-910 FINTE/910 28-Jun-16 Nithyanantham B B(T)(*) 170 24-May-16 Printing And Stationery 15,083 809 FIDB2P-3315 FIDB2P/3315 493063 24-Aug-16 28-Jun-16 92 No No
FINEXP-3627 FINEXP/3627 24-Aug-16 Raincheck Networks Pvt.Ltd. RNPL/16-17/0013 21-Apr-16 Licence And Fees (Expenses) 5,025 700 FINSBP-1679 FINSBP/1679 165553 27-Aug-16 24-Aug-16 128 No No
FINEXP-2609 FINEXP/2609 22-Jul-16 Confederation Of Indian Industry MEM/000037/WR 1-Jan-16 Membership And Subscription 5,025 700 FINSBP-1286 FINSBP/1286 165360 26-Jul-16 22-Jul-16 207 No No
FINEXP-2221 FINEXP/2221 7-Jul-16 Career Point Placement Services 2803/003 1-Apr-16 Recruitment Expenses 5,025 700 FIDB2P-2265 FIDB2P/2265 492393 11-Jul-16 7-Jul-16 101 No No
FINTE-2142 FINTE/2142 23-Sep-16 Kundan Rajeshwar Kumar(T) R003276 14-May-16 Sales Expenses 9,375 420 FIDB2P-4079 FIDB2P/4079 493570 26-Sep-16 23-Sep-16 135 No No
FINTE-852 FINTE/852 22-Jun-16 V. D Allenna(T) 2217 24-May-16 Sales Expenses 8,032 368 FIDB2P-4334 FIDB2P/4334 493767 4-Oct-16 22-Jun-16 133 No No
FINEXP-1889 FINEXP/1889 24-Jun-16 The Indian Hotels Co. Ltd. 3901703752 15-May-16 Sales Expenses 5,106 251 FINSBP-2022 FINSBP/2022 165736 29-Sep-16 24-Jun-16 137 No No

Exhibit 4: Excess Utilization of Form - I (Annexure B)
(Amt in Rs.)
FORM-I Details Procuerment Details
Sr. No.
FORM-I No. Date PO No. Date Supplier Name RM Description Quantity Value Duty Invoice No. Date RR No. RR Date Code No. Quantity Value Duty Excess
A B C D E F G H I J K L M N O P Q R
Borkar Packaging
12 PTN/12/16-17 25.05.16 PUR/PAI/PM/233 13.05.16 Combisunate 20/120 800,000 800,000 100,000 R000523 30.05.16 MUM-972 02.06.16 P28692 245,850 245,850 30,731
Pvt. Ltd.
PUR/PAI/PM/246 13.05.16 Carton1x18's Size :107 R000487 27.05.16 MUM-1067 08.06.16 P28692 222,750 222,750 27,844
x18x89 MM 300 GSM R000595 07.06.16 MUM-1110 07.06.16 P28692 344,775 344,775 43,097
813,375 13,375
Combisunate 20/120 797,000 797,000 99,625 R000709 18.06.16 MUM-1312 21.06.16 P28693 214,500 214,500 26,813
Carton1x24's Size :107 R000745 22.06.16 MUM-1377 22.06.16 P28693 85,800 85,800 10,725
x18x89 MM 300 GSM R000757 24.06.16 MUM-1409 27.06.16 P28693 198,000 198,000 24,750
R000786 27.06.16 MUM-1454 29.06.16 P28693 201,300 201,300 25,163
R000821 30.06.16 MUM-1501 30.06.16 P28693 97,350 97,350 12,169
796,950 (50)
Total 1,597,000 1,610,325 13,325

Exhibit 5: Non-Utilisation of Form - I (Annexure B)
(Amt in Rs)
Qtty of
Qty of Total Available R.R. Consol_ Supplier Asse. Edu S&H
No. Vendor Date Series Date Code No. Type Product Name Type Qty Rate Rate Per BED Cenvat
Form I Procure- Balance No. RR No. Name Value Cess Cess
ment
Combisunate 20/120
Award
Tab,Inner
Award Offset
MUM/27 Carton,30X1X18'S,
PTN/10/16-17 472000 468735 3,265 Offset 13.05.16 MUM 2797 9/19/2016 Prineters & P28700 PM PM 2,250 15,000 33,750 1,000 4,219 - - 4,219
97 Size:275X195X111
Printers Packaging
Mm,6Col,E/F,Amfm
P Ltd
Nigeria Exp(Dc)
*Combisunate
Dispersible Tabs
Meera Meera
MUM/27 20/120, Carton-
PTN/37/16-17 2121000 2118800 2,200 Offset 29.06.16 MUM 2750 9/12/2016 Offset P28238 PM PM 8,000 9,000 72,000 1,000 8,831 - - 9,000
50 30X1X12'S,Size:190
Printers Printers
X175X97Mm,Eng,4
Col,Amfm Exp
*Combisunate Dt
20/120,Carton,
Parksons Parksons 1X12'S(Cartnator),S
MUM/31
PTN/50/16-17 770000 70000 700,000 Packaging 28.07.16 MUM 3190 10/7/2016 Packaging P28260 PM ize:92X18X55Mm,E, PM 383,040 680 260,467 1,000 32,558 - - 4,310
90
Ltd. Ltd 4Col,
Amfm
Exp(Romacco)
*Combisunate Dt
20/120,Carton,
Parksons Parksons 1X12'S(Cartnator),S
MUM/30
PTN/9/16-17 4159500 3655300 504,200 Packaging 13.05.16 MUM 3033 10/1/2016 Packaging P28260 PM ize:92X18X55Mm,E, PM 316,960 680 215,533 1,000 26,942 - - 25,704
33
Ltd. Ltd 4Col,
Amfm
Exp(Romacco)
Parksons
PTN/93/16-17 2605000 1882900 722,100 15.11.16
Packaging
Total 72,550 43,233

Exhibit 6: Service Tax Credit of Specific Plants Distributed Among All Plants
(Amt in Rs)
Accounts Specific Plant Total Amount
HO Chikalthana 223,081
Chikalthana & Paithan 545,251
Chittegaon 29,730
Paithan 235,868
Waluj 1,414
Adwent Paithan 1,011
Total 1,036,355

APL - Excise and Service Tax - Final - 03-17

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APL - Excise and Service Tax - Final - 03-17

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Private & Confidential

Internal Audit Report

Ajanta Pharma Limited

20th April, 2017

Private & Confidential

20th April, 2017

Mr. Anand Joshi

Scope and Coverage 04

APL / Excise & Service Tax /Apr-16 to Dec- 16 3

Scope Audit Approach

Reconciliation with accounting & returns

Mr. Aashish Dhavde

APL / Excise & Service Tax /Apr-16 to Dec- 16 4

Excise Credit Service Tax Credit PLA

APL / Excise & Service Tax /Apr-16 to Dec- 16 5

APL / Excise & Service Tax /Apr-16 to Dec- 16 6

APL / Excise & Service Tax /Apr-16 to Dec- 16 7

APL / Excise & Service Tax /Apr-16 to Dec- 16 8

Observation Risk & Impact Recommendation & Action Plan

APL / Excise & Service Tax /Apr-16 to Dec- 16 9

Excise Duty Service Tax (Cenvat)

APL / Excise & Service Tax /Apr-16 to Dec- 16 10

Observation Risk &Impact Recommendation & Action Plan

APL / Excise & Service Tax /Apr-16 to Dec- 16 11

Observation Risk &Impact

APL / Excise & Service Tax /Apr-16 to Dec- 16 12

Recommendation & Action Plan

APL / Excise & Service Tax /Apr-16 to Dec- 16 13

Observation Risk & Impact Recommendation & Action Plan

APL / Excise & Service Tax /Apr-16 to Dec- 16 14

Observation Risk & Impact

APL / Excise & Service Tax /Apr-16 to Dec- 16 15

Recommendation & Action Plan

APL / Excise & Service Tax /Apr-16 to Dec- 16 16

APL / Excise & Service Tax /Apr-16 to Dec- 16 17

APL / Excise & Service Tax /Apr-16 to Dec- 16 18

APL / Excise & Service Tax /Apr-16 to Dec- 16 19

APL / Excise & Service Tax /Apr-16 to Dec- 16 20

APL / Excise & Service Tax /Apr-16 to Dec- 16 21

APL / Excise & Service Tax /Apr-16 to Dec- 16 22

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