State to collect VAT arrears

Cash-crunch forces officials to look at collecting `3,000cr outstanding

Cash-strapped Telangana State government has decided to focus on collecting outstanding taxes, including VAT, which several companies owed to the commercial tax department.

Presently, the commercial tax department need to collect a total tax arrears of about `3,000 crore from several companies, including major public sector undertakings.

Of the `3,000-crore arrears, about `1,500 crore are due from eight public sector units (PSUs) owned by the Central government.

According to officials in the commercial tax department, some stateowned entities have tax dues from 2004.

For example, stateowned oil marketing major Hindustan Petroleum Corporation Ltd (HPCL) owes `468 crore in tax dues from 2004 and another oil marketing company Indian Oil Corporation (IOCL) has to a tax arrears of `243 crore from 2005.

Due to cases pending with different courts among others, the state government could not collect tax dues from these companies.

Apart from public sector units, there are many small companies which owe about `1,500 crore.

Speaking to this newspaper, principal secretary Somesh Kumar said the government was not able to collect tax arrears from several companies due to litigation.

Instead of waiting for the court decision, the TS commercial tax department has decided to settle the matter through negotiations with the companies.

Accordingly Mr Kumar has initiated the negotiation process with Hindustan Cables Limited (HCL) that owes `32.76 crore in tax arrears since 2005.

Mr Kumar held discussions with HCL representatives and convinced them to pay the arrears.

After negotiations, HCL has cleared the arrears by paying `32.76 crore.

Now the principal secretary is concentrated on collecting tax dues from India Cement Company.

The Chennai-based cement manufacturer, which also has operations in Telangana, owes `19.62 crore since 2014.

Mr Kumar said that the discussions are going on with the representatives of India Cements.

He said that the department officials will discuss with all companies particularly with PSUs which have huge amount of arrears.

Mr Kumar expressed the hope that the negotiations with all other companies will be successful and the state government will get revenue.

Up to December 2017, the TS government’s total revenue receipts were `59,214.36 crore and its revenue expenditure was `63,213.23 crore. This led to a `3,998.87 crore revenue deficit.

To achieve revenue surplus by the end of the current financial year, the TS government has stopped all payments and also release of the fourth quarter funds to some departments in order to save money.