Tough to mop up taxman’s outstanding demand

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The outstanding tax demand of the income-tax department has grown more than fourfold to ₹42 lakh crore as on October 1 this year, from ₹10 lakh crore in 2019-20, according to a report of the parliamentary standing committee on finance. Of this amount, ₹27 lakh crore is flagged as difficult to recover by the department.

The dues sought by the department include ₹5.42 lakh crore where the assessees are not traceable, ₹8.60 lakh crore where there are not adequate assets attached for recovery and more than ₹2 lakh crore stuck in companies facing insolvency proceedings or liquidations, the report, tabled in Parliament, highlighted.

In case of the Central Board of Indirect Taxes and Customs (CBIC), the arrears have risen to more than ₹4.26 lakh crore in 2023-24 from over ₹3.02 lakh crore in FY22.

The committee expressed concern that in about 85% of indirect taxes and nearly 65% in direct taxes, the outstanding amounts were difficult to collect.

While the income tax department has made an action plan to recover the outstanding tax demand of ₹15 lakh crore, which is collectible, the committee has asked the CBIC to make a proper plan to recover the outstanding indirect tax.

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The committee also flagged that every third sanctioned post in both tax bodies was vacant, highlighting that in some posts, there were 100% vacancies and even for the crucial post of inspector of central excise, there were 7,744 vacancies.

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