Scrutiny had revealed that 13 industrial units eligible under the composite incentives scheme of the earlier (sales tax) law had availed of deferment incentive to the tune of Rs7,022.03 crore.
The Gujarat government not only refused to give any tax relief in the recently passed state budget for the benefit of ordinary people, it announced another Rs750 crore in new taxes. In contrast, the government has shown no urgency about recovering the Rs4774 crore that 13 companies owe it in unpaid sales tax.
The report of the Comptroller and Auditor General (CAG) of India on the state government’s revenue receipts for the year ended March 31, 2009, has severely criticised the government for failing to collect the unpaid tax amount. The CAG report was tabled in the state assembly on Tuesday.
In its report, CAG has pointed out that the state government failed to recover deferred tax from several large industrial units. It further says that scrutiny had revealed that 13 industrial units eligible under the composite incentives scheme of the earlier (sales tax) law had availed of deferment incentive to the tune of Rs7,022.03 crore. The deferment was allowed up to March 31, 2006, to the companies which had opted for it under the GVAT Act.
As per the provisions of the deferment incentive, the department should have recovered Rs1,170.34 crore every year from these units. “But the department did not initiate any action to recover the instalments due,” the CAG report states.
The CAG further states that, in case of delay in payment of instalments, the government could have recovered interest from these companies at the rate of 18 % per annum. As a result, the total amount that the state government could have recovered up to March 2009 - but had failed to recover - comes to Rs4774.98 crore. (This amount includes interest amount of Rs1263.96 crore.)
The CAG had earlier asked why the government had failed to recover the above-mentioned amount from companies.
In its reply, the state government had stated in December 2009 that there was no provision to recover the deferred amount from units which had availed of exemption under the GVAT Act.
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