MP waives Rs 225 cr commercial tax

The MP government has decided to write off commercial tax worth Rs 225 crore, to be paid by firms, traders, companies and institutions "" an amount that cannot be recovered.

The state has to recover Rs 1,079.85 crore as commercial tax, excise duty and registration fees from firms and other entities.

"Two committees have been formed to write off such dues," a government spokesperson said, adding that the cabinet had taken a decision on this.

One committee will be empowered to write off any dues or bad accounts of sick or closed entities, while the other will have rights to write off accounts of Rs 5 crore.

The committees will decide only in cases where firms are sick or closed for more than five years and no property or assets are available to recover the dues.

The state government has also vested more powers in district authorities to write off bad accounts. "The excise commissioners will now have the authority to write off a bad but non-recoverable amount up to Rs 10 lakh and the district collectors will have rights to write off Rs 1 lakh dues. Earlier, the commissioner had powers to write off Rs 50,000 and collectors were empowered to write off only Rs 10,000."

For companies of other states with dues to repay, the Cabinet has decided to appoint advocates of those states for fees to settle dues.

But the government is silent on cases of wilful default. In an inter-corporate deposit scheme launched by the state industry department, a case involving Rs 1,000 crore is under investigation. As many as 22 firms have failed to pay dues even after one-time settlements and huge cuts in repayment interest from 18 per cent to 1 per cent.