Hyderabad: VAT arrears in the state amounting to over Rs 350 crore that have piled up over the last six years will be recovered by invoking the Revenue Recovery (RR) Act. The government had issued notices in July to the defaulting firms to clear arrears within a month, but there was no response. The government has now directed officials to attach the bank accounts and properties of defaulters to recover arrears by invoking the RR Act. An official with the commercial taxes department said the recovery process was kept on hold with the implementation of GST from July 1.
Principal secretary, commercial taxes, Some-sh Kumar said, “The department was busy with transition from VAT to GST since June due to which the VAT recovery process could not be taken up. Now that the new tax regime has settled down, we have shifted our focus to recovering VAT arrears by invoking the RR Act.” The state had issued an Ordinance in September to amend the VAT Act to recover tax arrears. The Ordinance will be re-placed by a law in the ongoing session of the Legislature. The amended Act empowers officials to inspect records dating back to six years to detect tax evasion. Right now, officials can verify records of four years.
The amended VAT Act will allow officials to take up any investigation, inquiry, verification including scrutiny and audit, assessment proceedings, adjudication and any other legal proceedings for recovery of arrears. The government has been continuing and strengthening VAT Act even after GST came into force in July 2017 with a view to recover previous arrears.
