Maharashtra government yet to recover Rs89,000 crore tax revenue from traders, firms

While ₹65,908 crore of this amount is mired in litigations and disputes, pending in various courts for years, the state has failed to recover ₹23,753 crore owing to various other reasons over the past few years

The state exchequer, which is burdened with a debt of ₹4.71 lakh crore, has an outstanding tax revenue of ₹89,661 crore, which it is yet to recover from traders and companies. While ₹65,908 crore of this amount is mired in litigations and disputes, pending in various courts for years, the state has failed to recover ₹23,753 crore owing to various other reasons over the past few years.

State finance minister Sudhir Mungantiwar said the outstanding amount is due to the disputes. (HT File)

The figures of the outstanding tax revenue were revealed in the state’s budget document, tabled earlier this week in the legislature.

The major chunk of the outstanding amount, ₹65,396 crore, is accrued from sales and value added taxes on motor spirits and lubricants. The second highest outstanding amount is from central sales taxes, amounting to ₹19,456 crore.

Besides taxes on motor spirits and lubricants and central sales tax, the outstanding amount is also accrued from taxes on professions and employments; minor and major minerals; taxes on vehicles, goods and passengers; stamp duty and registration, among others.

“The outstanding amount is due to the disputes. For instance, we have raised tax of ₹459 crore on a Thane land, but the owner has moved the Supreme Court. Lottery traders owe ₹900 crore since 2006-09, but they are not traceable now. We expect at least ₹12,000 crore to be generated from the amnesty scheme which is getting a good response. Around 20-25% of the pending taxes is the actual outstanding; the rest is penalty and interest amount on the actual taxes,” said state finance minister Sudhir Mungantiwar.

“We expect our amnesty scheme, launched two years ago and extended by a month till July 31, to settle at least 15,600 cases worth ₹2,000 crore of the outstanding amount soon. We are amending the existing Act to weed out the ambiguities,” he said. Some of disputes between the government and the taxpayers date back to the early 1990s. “In some cases we received the orders in our favour, but could not recover the money as the mortgaged property had rights of secured creditors. Some of the dealers and traders are either not traceable or have changed their business,” another official said.

Officials are of the opinion that even if all the cases are settled in the courts, not more than 20% of the outstanding amount is likely to be recovered owing to the disparities and ambiguities in laws, their wrong interpretation by officials, and the heavy concessions provided in the amnesty scheme.

The official said outstanding amount from the central taxes is more owing to the failure of dealers and traders in securing bills for inter-state trades.

Rupesh Keer of Samarthan, an organisation that analyses the budget, said, “State debt burden has increased multi-fold. Most part of it is used to pay off interest on the debt, while the capital expenditure is going down every year. The state should explain to the people why it has not been able to recover this long-pending tax revenue. If it is realized judiciously, it will help reduce budget deficit and the government may avoid the 10-15% cut initiated owing to the outlays every year.”