Maharashtra’s outstanding tax revenue a major concern

While the state is struggling with revenue deficit, its outstanding tax revenue from traders and companies is also on the rise

While the state is struggling with revenue deficit, its outstanding tax revenue from traders and companies is also on the rise.

(HT)

It has increased to a whopping over ₹1,13,198 crore in 2019-20 , states the budget documents released by the state on Monday. Of the amount, ₹80,035 crore is disputed tax amount for which litigations and appeals are pending in various courts for years and ₹33,162 crore is the accumulated outstanding tax revenue that the government could not recover over various reasons in the past many years.

There is also a rise of ₹9,272 crore if compared to the 2018-19 figures, when the outstanding tax revenue was ₹1,03,926 crore, states the budget documents released by the state finance department.

The budget book has bifurcated the pending arrears into two groups — amount under dispute along with the number of years and amount not under dispute, but could not be recovered. Besides, the outstanding amount from taxes on professions and employments, minor and major minerals, luxury tax, entry tax, revenue from land, stamp and registration fees, taxes on vehicles, goods and passengers, electricity duties, among others.

The budget document that was presented in the state legislature on Monday said the tax revenue is outstanding for years and most of the outstanding amount is pending from sales tax and value added taxes (VAT) on motor spirits and lubricants which accounts to ₹82,391 crore, which comes to 72.78% of the total arrears. It includes both the disputed amount of ₹58,242 crore and ₹24,148 crore that is yet to be recovered.

The second highest outstanding amount is from central sales that accounts for ₹25,052 crore, which is 22.13% of the total outstanding bills. It also comprises disputed amount of ₹18,366 crore and ₹6,686 crore, which are yet to be cleared, states a document presented by the finance minister Ajit Pawar.

Maharashtra is staring at a drop of up to ₹1 lakh crore in its revenue. The revenue receipts have been reduced by ₹57,959 crore and are expected to increase further if the central government does not release the state’s share in tax collection on time. Maharashtra’s outstanding with the Central government is around ₹50,000 crore.

“Most of the tax amount that is yet to be recovered is blocked due to litigations and appeals in various courts. We are trying to encourage people to clear their dues through amnesty schemes. We have launched amnesty scheme twice in the past three years and response was good, but not very impressive,” said Manoj Saunik, additional chief secretary, finance department.

Rajagopal Devara, principal secretary (reforms), said they could recover ₹4,500 crore through the last amnesty scheme and settled 90,000 cases. These were the cases where disputed amount was very low. “When one goes to court, the law takes its own course of time. That is why we keep coming up with amnesty schemes at regular intervals. This year, too, we were planning another amnesty scheme, which could not be brought in. Next year, we would be coming up with one more scheme,” Devara said.