Tax arrears in Maharashtra balloon to Rs 1.04 lakh crore

Of the Rs 1.04 lakh crore, statistics show that Rs 40,961 crore were accumulated in the last two years alone, while another 17 per cent — Rs 18,179 crore — has been pending for over 10 years. (Representational Image)

Tax arrears in Maharashtra have now increased to a staggering Rs 1.04 lakh crore, prompting the state government to beef up its recovery. According to disclosures made by state’s Finance Minister Ajit Pawar in the 2020-21 budget document, the government’s tax collection machinery is sitting on tax arrears totalling Rs 1,03,926.70 crore due for one year or more, an amount close to the state’s development programme for 2020-21, which is estimated at Rs 1,15,000 crore.

These arrears, if realised, would have wiped away the state’s fiscal deficit, or gross annual borrowings of the state government, which has soared to Rs 78,617 crore, which, in turn, would have reduced the amounts spend on debt servicing. With the widening gap between income and expenditure, Maharashtra’s debt is projected to cross Rs 5.20 lakh crore in 2020-21, forcing the government to spend Rs 35,531 crore in servicing of this debt alone.

Of the Rs 1.04 lakh crore, statistics show that Rs 40,961 crore were accumulated in the last two years alone, while another 17 per cent — Rs 18,179 crore — has been pending for over 10 years. While the government’s latest tax policy talks about an action plan for “recovery of pending taxes and plugging leakages”, its record of collecting even undisputed tax arrears doesn’t inspire much confidence.

Mere collection of the undisputed tax arrears that were due at the end of the reporting year 2018-19 will give the government nearly Rs 29,200 crore — 178 per cent of the government’s budgeted expenditure — for agriculture and allied activities in 2020-21.

While spelling out the Uddhav Thackeray-led coalition government’s tax policy for 2020-21, Pawar said it was necessary to dispose of appeals and strengthen recovery of pending taxes. Sales tax and value added tax alone accounted for over 73 per cent (Rs 75,648 crore) of total tax arrears. “The emphasis is on mobilising additional resources through the recovery of pending tax revenue,” said an official.

The state had earlier launched an amnesty scheme for recovery of sales tax dues.

The Central Sales Tax has pending tax recoveries totalling Rs 22,766 crore, whereas arrears in land revenue were Rs 1,580 crore. Entry tax accounted for Rs 961 crore worth of arrears, and Rs 831 crore were pending in premiums levied on miners for extraction of major minerals. Electricity dues accounted for Rs 589 crore while collective arrears in non-tax revenues stood at Rs 4,308 crore.