Commercial tax arrears climb to Rs 4,080 cr

Commercial tax dues for the state government have mounted to Rs 4080.70 crore by the end of 2010-11 even as it tries hard to recover the amount from the defaulting firms to meet Rs 10,000 crore collection target set for this fiscal.

The process of recovery of dues has been decelerated by cases pending in both the Supreme Court and Orissa High Court. While commercial taxes of Rs 177 crore are not being collected due to cases pending in the apex court, the Orissa High Court is yet to decide on tax disputes for dues of Rs 1691 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 has also served showcause notices on firms with combined tax default of Rs 1020 crore.

“Based on the recommendations made by the expert committee headed by Sanjiv Hota, the state government is looking at one-time settlement formula for recovery of commercial tax dues. The recovery has been slow as litigations are pending in courts", said Prafulla Chandra Ghadai, minister for finance and public enterprises.

The state government is also mulling to introduce the Orissa 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 finding by Special Investigation Team of the State Vigilance about sales tax evasion worth Rs 3164 crore by various industrial houses.

Nine big companies, mostly in steel & mines sector and 75-odd small and medium scale firms have evaded sales tax payment by camouflaging the taxable component as non-tax portion.

The defaulters' list includes Vedanta Aluminium Ltd (VAL), Bhushan Power & Steel Ltd, JSL Ltd (formerly Jindal Stainless Ltd), Visa Steel Ltd and Rathi Steel Ltd among others.

Taking note of the serious evasion by these companies, the state finance department has decided to serve notices on these firms.

The department expected to mop up Rs 600-700 crore from the evaders.