India may have to write off Rs850b tax arrears
Pti, New Delhi
The Indian government may have to write off a whopping Rs. 850 billion tax arrears out of the total arrears accumulated over the past several years as these have been found to be "non-recoverable" by the Income Tax department.Out of the outstanding Rs. 1190 billion tax arrears up to 2003-04, about Rs. 850 billion is "non-recoverable". This includes Rs. 284 billion outstanding against Harshad Mehta Group of Companies, banks and stock brokers involved in 1992 Securities Scam, sources in the Finance Ministry told PTI. The department, which has so far recovered about Rs. 100 billion tax arrears against the target of Rs. 110 billion for 2006-07, has expressed helplessness in recovering the "non-recoverable" tax arrears. "In fact, about Rs. 850 billion arrears are outstanding only on paper, and are mounting every year due to interest addition," a senior Income Tax official said. The "non-recoverable" dues also include about Rs. 120 billion against those companies and assesses, whose assets have reduced due to closure of the units or fall in stocks. In many cases, the companies have vanished from the market, or funds have already been transferred elsewhere before the recovery of tax arrears, the sources said. The department has also expressed doubts about recovery of tax arrears from companies and persons involved in various scams like Telgi Scam and Fodder Scam in Bihar. Income Tax department sources maintained that in some cases, funds have been transferred by assesses abroad through Hawala route, and there was nothing to recover.
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