Kerala - Thiruvananthapuram   

Government to mop up Rs.1,936 crore from PSUs

Thiruvananthapuram: The State government is all set to mop up Rs.1,936 crore from State Public Sector Undertakings (PSUs) through an amnesty scheme for settling their commercial tax arrears.

The scheme will provide an escape route to the PSUs to settle tax cases, some of which have been pending for years either in departmental disputes or litigation. The PSUs opting for the scheme would be eligible for waiver of interest and penalty. Profit-making PSUs can settle their arrears by paying 50 per cent of the principal amount, while the loss-making ones need pay only 25 per cent of the principal amount. The arrears relate to payment of sales tax, central sales tax, additional sales tax and surcharge. Those PSUs which face revenue recovery proceedings by sale of their landed property as a result of order of any court, tribunal or other authorities will not be eligible for the scheme. The PSUs have been asked to file their applications before the respective assessing authority before June 30. Only those PSUs who opt for settling all their outstanding arrears for a full year will be eligible to apply under the scheme.

Finance Minister T.M. Thomas Isaac, who had promised to bring in a tax amnesty scheme in his budget speech, told The Hindu that the announcement was part of a comprehensive restructuring process of PSUs. These amounts are due to the government, but have been pending for years. “Public units settling their dues would be eligible for budgetary support,” he said.

Mara Pandian, Secretary (Commercial taxes), said the amount, Rs.1,936 crore, was based on actual claims of taxes and liabilities of assessing authorities.

According to government sources, most of the arrear cases are held up at various levels of litigation and disputes over claims, some of which are over 20 years old. These PSUs would get an opportunity to settle their dues through the amnesty scheme.

T. Balakrishnan, Principal Secretary (Industry), said instructions had been issued to all PSUs under the Industry Department to utilise the amnesty scheme. Out of the 42 PSUs in the manufacturing sector, 29 are profit-making and the total tax arrears of these units would be less than Rs.200 crore. Many of the PSUs would be able to pay off their liabilities because they have registered cash profit, he said. According to available information, the Kerala State Beverages Corporation, Kerala State Road Transport Corporation, Kerala Water Authority and the Kerala State Electricity Board are among the prominent PSUs that have tax arrears. Most of them have not been paying the arrears expecting some waiver scheme.

Since the Finance Minister has linked the amnesty scheme to future budgetary support, several PSUs might find it an attractive proposition to pay up their tax arrears. The final word, however, would be with the tax assessing authorities. Once the PSUs are intimated about the payable amount, they would have to remit 25 per cent of this within 15 days.

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