Collectible tax arrears only Rs 8,000 crore

THIRUVANANTHAPURAM: Kerala Public Expenditure Review Committee has drastically scaled down the tax arrears of the State.

The Budget documents, tabled in the Assembly in January, had stated that the total tax arrears was a  humungous Rs 32,526.96 crore, and the collectible arrears it said totalled Rs 23,027 crore.

However, the KPERC report which was tabled in the Assembly on Monday, says that the total arrears will not be more than Rs 16,136 crore, and the amount that could be collected just about Rs 8000 crore.

The new figures were arrived at after the KPERC chaired by noted economist B.A. Prakash conducted a study of the top ten ‘arrear accumulating’ departments out of a total of 37.

“Earlier, the Chief Minister had said that the budget figures were bloated as a result of a clerical error.

According to him, certain departments had mistook lakhs for crores,”said Mary George, a KPERC member. The KPERC decided to conduct a study in the wake of the Chief Minister’s observation.

Arrears of the 10 case study departments work out to about 77 percent of the total estimated arrears of Rs 16136 crore.

The study intended to examine arrear position, measures adopted by each department to collect it in a time bound manner, percentage collection of each department and bottlenecks in the path of collection.

Commercial taxes department, it was found, was the worst performer with Rs 6692.79 crore as arrears.

“Of this, 70.4 percent is under dispute while the remaining part is collectable immediately, if necessary steps are taken both by the department and the Government,” the report states. Electrical Inspectorate comes second with Rs 5450.71 crore all of which is collectable.

In a district-wise analysis of cases with collectable arrears of rupees one crore and above, Ernakulam top the list with Kollam close behind.

“Most of those who have run up arrears in Kollam and Ernakulam are corporate bodies,” the report states.

The report has identified non-registration as one of the major methods practiced by dealers to evade tax. As per KVAT Act 2003, every dealer with annual turnover not less than Rs 5 lakh should get registered.

There are around 20 lakhs shops and establishments in Kerala as per the data provided by the Bureau of Economics and Statistics. Of this only 3.85 lakh have got themselves registered.