Tax dues of Rs 2 lakh cr cannot be recovered

Unrecovered sum is just from 379 cases, was almost equal to what the govt received from personal income tax in 2012-13

The Income Tax department has failed to recover tax revenues of about Rs 1.9 lakh crore as on December 31, 2012 since there are no assets or insufficient assets in these cases. The unrecovered sum is from just 379 cases and was almost equal to what the government got from personal income tax duirng 2012-13.

According to the data available with the Central Board of Direct Taxes (CBDT), the government is not able to recover another Rs 3,657 crore from 102 cases as these assesses are not traceable.


The Central Board of Excise & Customs has also reported 15,500 cases involving non-recoverable tax of Rs 4,796 crore. The board has said these cases are fit for a write-off.

Expressing concern over such state of affairs with regard to recovery of revenue dues, Parliamentary Standing Committee on Finance has asked the government to enquire into the reasons as to how these cases involving such huge amount of dues from assesses became unrecoverable in the first place.

There are 3,519 cases of central excise duty evasion involving Rs 2,812 crore that cannot be recovered. In customs, the number of cases where recovery is not possible is even higher at 7,058 involving Rs 1,450 crore. Besides, an amount of Rs 506 crore cannot be recovered in 4,923 cases of service tax.

Further, the CBDT found that the arrear demand increased to Rs 4,82,027 crore in 2012-13 from Rs 3,33,079 crore and Rs 2,48,927 crore in the previous two years. The rise in indirect tax arrears was even steeper. The arrears from excise, customs and service tax increased to Rs 1,03,975 crore in 2012-13, against Rs 33,791 crore in 2011-12. Service tax arrears saw a 10-fold increase.

In its reply to the committee, the finance ministry said that most of these cases are locked up in appeals and it is pressing for early hearing petitions and trying to get stay orders vacated. Dedicated teams of officers have been created in the field formations for expeditious recovery of dues.

Unsatisfied with the reply of the finance ministry, the Standing Committee has recommended “urgent, time-bound and concrete action plan to clear the backlog and realise the revenue dues” saying it would go a long way in helping the government bridge the fiscal deficit.

In the light of a shortfall in budgeted tax collections last year, the tax department has stepped up vigil on tax evaders and sent letters to 1,05,000 assesses who had a PAN card but did not file their income tax returns. This year it may send more letters to people who filed returns but did not declare their true income.

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