1. 1 Regional Training Institute, Ranchi Structured Training Courseware on State Receipt Audit Audit of Water Rate Receipts

2. RTI, Ranchi2 Session Objectives At the end of the session, the participants will be able to –Understand the nature of water rate receipts –Explain the mode of assessment and –List the audit checks to be carried out with regard to water rate receipts

3. RTI, Ranchi3 What is Water Rate Tax? A non-tax revenue of the States State Government provides irrigation facilities to farmers Levies tax on use of water in return

4. RTI, Ranchi4 Organisational Set up Assessment, Levy and Collection of water rates entrusted to –Subordinate offices of Revenue Department –Executive Engineers/Asst Engineers of Irrigation and Public Works Departments

5. RTI, Ranchi5 Nature of Water Rate Receipts Charge levied by Irrigation Department of a State –On land actually irrigated by canal water –Canal water supplied for other purposes –Canal includes channels, reservoirs, tanks, drainage, lift irrigation of the State Some States levy flat rate per acre of land within command area

6. RTI, Ranchi6 Conditions of Supply of Water Under irrigation agreement On demand for irrigation of specified areas To supplement a village tank For industrial, urban or other purposes not related to agriculture For irrigation of compulsorily assessed area

7. RTI, Ranchi7 Classification of Irrigation Projects Based on agricultural command area –Major –Medium –Minor

8. RTI, Ranchi8 Basis for Classification To levy compulsory basic water rates –Based on guaranteed depth and period of water supply during the period of growth of main crop (paddy or wheat) –Water rates for other purposes as prescribed by State Government from time to time

9. RTI, Ranchi9 Assessment of Water Rate Preparation of statement of lands irrigated (Sudkar) Preparation of detailed measurement cultivator- wise (Khasras) Rates as per Irrigation Acts/rules

10. RTI, Ranchi10 Timeframe for Tax Collection Kharif crops – 99 days for collection but before 31 st January Rabi crops – 68 days for collection but before 31 st May

11. RTI, Ranchi11 Important Registers and Records Preliminary Assessment Rolls of the compulsory basic water rates Application for supply of water for crops (other than staple crop) and application for supply other than for irrigation purposes

12. RTI, Ranchi12 Important Registers and Records (contd.) Demand, Collection and Balance Register Register of remittances Challans List of irrigation works

13. RTI, Ranchi13 Important Registers and Records (contd.) Agreements for supply of water for purposes other than irrigation Long term/short term agreements for supply of water for irrigation purposes Register of remissions

14. RTI, Ranchi14 Audit Checks Verify the irrigation potential created by the Government during the last five years (preceding the date of review) in respect of minor, medium and major irrigation projects –Area certified by the Engineering Authorities –Area verified by the Tahsildar during the period –Discrepancy if any, and its impact on Government revenue

15. RTI, Ranchi15 Audit Checks (contd.) Check if the current codal procedures for watching of –demand, –collection and –balance of revenue are being observed Whether non-observance of codal procedures has led to any leakage of revenue

16. RTI, Ranchi16 Audit Checks (contd.) See if the demand as reflected in the prescribed register is correct with reference to the command area –analyze the reasons for variations, if any, –its impact on revenue

17. RTI, Ranchi17 Audit Checks (contd.) Verify the balance of arrears at the end of each year Investigate into reasons for arrears Analyse the percentage of arrears to total collection

18. RTI, Ranchi18 Audit Checks (contd.) Check the demand for fluctuating water rate with reference to –targets fixed –area as per project report and –actual area brought under cultivation

19. RTI, Ranchi19 Audit Checks (contd.) Check if the prescribed registers for collection of fluctuating water rates has been –properly maintained and –demand has been correctly assessed

20. RTI, Ranchi20 Audit Checks (contd.) See if there is any shortfall in the area as per –the target –actual cultivation Analyse reasons for variation and comment suitably

21. RTI, Ranchi21 Audit Checks (contd.) Verify if there has been any write off/remission of water rate and if yes, ascertain the reasons for the same –Check if there has been any irregular write off Check if there has been any write off order which lead to reduction in command area, permanently

22. RTI, Ranchi22 Audit Checks (contd.) Check if there has been any irregularity in assessment See if, –the procedure of assessment is correct –the demand notice had been issued on time

23. RTI, Ranchi23 Audit Checks (contd.) Check whether the assessment was made timely and whether delayed assessment had led to accumulation of arrears leading to loss of revenue

24. RTI, Ranchi24 Audit Checks (contd.) See if the command area had been occupied fully and if not, –ascertain the reasons for the same along with –the extent of area involved

25. RTI, Ranchi25 Audit Checks (contd.) Check if there has been utilization of water for purposes other than for specified purpose Check if the water rates are –assessed, –levied and –realized correctly; if not, Analyse the extent of water utilised and revenue not realized

26. RTI, Ranchi26 Audit Checks (contd.) Verify if there is a system for monitoring the supply of water See if there is any addition to the ayacut area either –due to the extension of old canals or –due to settlement operations, and if so, Whether these areas are properly assessed

27. RTI, Ranchi27 Audit Checks (contd.) Check if the registers and records pertaining to assessment are –maintained properly, and if not, –whether it has led to any leakage in revenue

28. RTI, Ranchi28 Common Irregularities in Water Rate Receipts Delay in raising demand due to delay in preparation of Sudkars Application of incorrect rates of water charges e.g. at pre-revised rates