Hyderabad: The commercial taxes department has been grappling with severe staff shortage, which is giving traders the scope for evading taxes.
Out of 3,539 sanctioned posts in the department, 1,106 are lying vacant due to which there is no effective monitoring mechanism to check tax evasion.
With this, the staff is not in a position to check “zero business” or track old and new dealers who are doing business without obtaining licenses.
Chief Minister K. Chandrasekhar Rao has recently taken over the commercial taxes portfolio from minister Talasani Srinivas Yadav to ensure proper tax compliance, but without addressing the staff shortage issue, the chances of checking tax evasion look bleak.
The department contributes over 65 per cent of the total revenue of the state. Last year , the state earned Rs 26,972 crore and for 2016-17, the government has targetted '36,000 crore.
VAT and central sales tax remain the major revenue contributors among all the commercial taxes. However, with posts of deputy commissioners, assistant commissioners, commercial tax officers and assistant CTOs lying vacant, tax evasion under both these heads have became rampant.
A senior department official said, “There is an urgent need to reform the entire department. The department still continues to function with the decades-old circle system even after manifold increase in the number of traders over the years. About 80 per cent of total revenue is accrued from seven circles in Hyderabad alone. While there are 1.50 lakh TIN (Taxpayers identification number) traders in the state, there are nearly 57,000 traders in Secunderabad division, but there is no staff to monitor tax compliance.”
As per norms, there should be one circle for 1,000 traders for effective monitoring. But, in Hydernagar and Madhapur, there are over 6,000 registered dealers each, while in circles like Osmanganj, Maharaj-ganj and Ramgopalpet, there are less than 500 dealers each, exposing the mismatch between existing circles and registered traders.
Commercial Taxes NGOs Association president T. Venkateshwarlu said, “The government is very much aware of this problem but no efforts had been made to resolve this all these days. Since the department is now being handled by the CM himself, we hope that the issue will be resolved soon. We have brought all the issues plaguing the department to the notice of the Cabinet sub-committee.”
