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The government has been able to recover just 15 per cent of the total outstanding arrears of corporate tax of Rs 20,78,267 crores in the last five years.
The data presented by the Ministry of Corporate Affairs to the Lok Sabha while replying to a written question in July this year, reveals that arrears of Rs 3,19,248 crore have been recovered from defaulters. Data shows that in the last three fiscals, the government was unable to collect even 20 per cent of the corporate tax arrears annually.
“A substantial part of the outstanding taxes is not readily collectible due to various reasons, including companies in liquidation, before NCLT under the Insolvency and Bankruptcy Code, and companies not having adequate assets for sale and recovery,” the Ministry stated.
It added that other reasons for under-recovery included the stay on the tax demand by Income Tax Authorities, the Income Tax Appellate Tribunal (ITAT) or the High Court or Supreme Court. The assets of the company jointly attached with other government agencies was another reason for the non-recovery of tax, according to the Ministry.
Recently, the government has lowered the corporate tax by 10 percentage points for existing companies and by 12 basis points for new companies, to boost investment in the economy. However, the data puts a question mark on the efforts to recover arrears, even as concessions are being offered to companies.
“ … The Income Tax Department makes concerted efforts to recover the arrears of taxes outstanding against various corporate taxpayers, including attachment of bank accounts and debtors, attachment and sale of movable and immovable properties, prosecution of the directors of the company for non-payment of taxes, etc,” the Ministry told the House.
The Ministry added that the government monitors the tax and other payments made by each assessee/ taxpayer registered under the relevant Acts, operating under the Central Excise/ GST/ Customs. The defaulters are dealt with in line with provisions of the said Acts/Rules. The action to recover dues is undertaken in line with the provisions of the relevant Acts and rules.
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