The Comptroller & Auditor General of India (CAG) has pulled up the Odisha government for not taking adequate steps to realize sales tax arrears from the dealers worth Rs 1,059.62 crore (as on March 31, 2011).
In its latest report on revenue receipts of Odisha, CAG has observed that collection of arrears from 2006-07 to 2010-11 was negligible ranging from 0.48 per cent to 3.23 per cent during 2006-07 to 2010-11.
The Commissionerate of Commercial Taxes (CCT), Odisha clarified that tax arrears were locked up at various stages- show cause notices issued to dealers (Rs 235.84 crore), stayed by the departmental authorities (Rs 314.45 crore), stayed by the Supreme Court (Rs 224.12 crore) and involved in revenue recovery certificate cases (Rs 265.32 crore).
It may be noted that total commercial tax dues for the state government had mounted to Rs 4,080.70 crore by the end of 2010-11.
The process of recovery of dues has been decelerated by cases pending in both the Supreme Court and the Odisha High Court. While cases of commercial taxes worth Rs 177 crore are pending in the apex court, the Odisha High Court was yet to decide on cases for dues worth Rs 1,691 crore.
The state finance department, on the other hand, is reviewing cases for collection of dues to the tune of Rs 852 crore. The department had also served showcause notices on firms on whom the defaulting amount totaled to Rs 1,020 crore.
Based on the recommendations made by the expert committee headed by Sanjiv Hota constituted to suggest revenue enhancement measures the state government is looking at one-time settlement formula for recovery of commercial tax dues.
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The state government was also mulling to introduce the Odisha Sales Tax Settlement Arrears Settlement Bill-2011 in the assembly to hasten the recovery of dues.
Adding to the woes of the state government was the recent case of sales tax evasion worth Rs 3,164 crore, according to investigation by Special Investigation Team of the State Vigilance.
Nine big companies, mostly in steel & mines sector and 75-odd small and medium scale firms had evaded sales tax payment by camouflaging the taxable component as non-tax portion. The department expected to mop up Rs 600-700 crore from the evaders.