Maharashtra Government is all equipped to welcome the new indirect tax law, Goods and Services Tax Act from July 2017, but it has almost Rs 60,000 crore of value added tax (VAT) and sales tax dues locked up in litigation and disputes for years.
Reportedly, most of these are with public sector units and oil companies. The disputes on these arrears are pending at various levels like the sales tax department, tribunal and courts. The Government is trying to expedite these appeals or even arrive at out of court settlements to speed up recoveries of this money.
Finance Minister Sudhir Mungantiwar said these amounts were pending since the year 2000 with some dues even going back to 1996-97. “Many cases are with courts and tribunals… one-party orders challenging imposition of compound interest have been challenged,” he added, stating that they had recovered around Rs 2,000 crore arrears last through an amnesty scheme.
“This amount consists of not just sales tax dues but also interest that has compounded over the years and is more than the principal amount,” said Mungantiwar, adding that the sales tax department would expedite the hearings on these appeals to unlock these monies. The state government is increasing the number of tribunal benches to expedite hearings.
“We are also appointing expert lawyers to represent in these courts,” he said.
In 2016-17, the state saw VAT collections worth Rs 90,585 crore. This is the largest source of revenues for the state exchequer. The VAT structure replaced sales tax in Maharashtra from April 1, 2005.
