State hopes to recover ₹10,000 crore from amnesty scheme

The current outstanding from unpaid tax revenue is almost two-third of the state’s estimated tax revenue — ₹3.08 lakh crore — in 2022-23

Mumbai: With the outstanding of the dues from taxes on various goods and services touching ₹1.93 lakh crore, the state budget’s amnesty scheme announcement, meant to recover GST and Sales Tax dues, is expected to recover ₹10,000 crore this fiscal while disposing of thousands of pending cases pending.

As per the budget documents presented on Friday, of the outstanding of ₹1.93 lakh crore from unrecovered tax (ANI)

As per the budget documents presented on Friday, of the outstanding of ₹1.93 lakh crore from unrecovered tax revenue from various sectors, ₹1.45 lakh crore is mired in disputes and the cases are pending at various levels of litigations. At least ₹1.56 lakh crore of the total unrecovered ₹1.93 lakh crore pertains to GST, VAT, entry, luxury taxes from around 420,000 cases that fall under the purview of the GST Commissionerate.

The current outstanding from unpaid tax revenue is almost two-third of the state’s estimated tax revenue — ₹3.08 lakh crore — in 2022-23. This gains significance as the state is staring at a revenue deficit of ₹24,353 crore in FY 23 and ₹30, 724 crore in FY 22.

The amnesty scheme waives off the tax less than ₹10,000, while traders and dealers with the dues up to ₹10 lakh can resolve their case by paying only 20% of dues. They have also been given a relaxation from one-time payment and will be allowed to pay their dues in instalments in six months till September 2022. The scheme is expected to dispose of 97,369 cases with an outstanding of less than ₹10,000 — the accumulated outstanding comes to ₹30.31 crore.

“Of the outstanding of ₹1.56 lakh crore to GST Commissionerate, ₹1.25 lakh crore is from the disputed claims, which are pending at various levels of appeals. Many of the cases are from the Sales Tax era pre-2005 before the introduction of VAT regime and GST in July 2017. Most of the dealers with smaller amounts are not traceable because of shutting down of the businesses or change in the ownership. The amnesty scheme launched in 2019-20 helped us in recovering ₹3,800 crore. By making it more lucrative this time we expect to recover at least ₹10,000 crore. Besides waiving off 80% of the outstanding for the dues less than ₹10 lakh, we have given nine months to pay the dues to the traders with the outstanding of more than ₹50 lakh,” an official from the GST Commissionerate said.

Besides traders and manufacturers, multinational companies and state-run public sector utilities including oil companies also owe the state tax dues. “The disputes are often technical, based on difference in calculations or on administrative reasons such as the failure to produce the documents for inter-state trades. The outstanding by big players with high amounts is unlikely to be settled under this scheme as they have not been given any waiver except the relaxation of paying the outstanding in instalments,” the official said.

Mitesh Modi, president, All India Electronics Association, said, “Most of the disputes are for the levy of higher taxes than the actual payable. As such, the figure of the outstanding amount is much greater than actual due to the miscalculations by the officials or the accountants of the dealers. Welcoming the move by the state government, we have appealed to our members to settle the claims once and for all and get rid of the legal battle.”

Rupesh Keer of Samarthan, the non-profit that studies the budget, said, “The outstanding of the taxes is due to the faulty system of the collection of taxes and needs to be rectified. Many disputes related to the claims are out of the faulty system. We had brought this to the notice of the finance minister earlier but nothing has been done.”