Over 94% of outstanding Tax hard to Recover: CAG Report

Over 94 per cent of the coun­try’s uncol­lect­ed tax demand of Rs 5.75 lakh crore is dif­fi­cult to recov­er, the Comp­trol­ler and Audi­tor Gen­er­al of India has said. The CAG, in an audit report on direct tax­es tabled in Par­lia­ment on Fri­day, also hauled up the Income Tax Set­tle­ment Com­mis­sion and the income-tax depart­ment for their slow func­tion­ing and inabil­i­ty to enforce col­lec­tion and recov­ery of out­stand­ing demand.

The audit report said the uncol­lect­ed tax demand had risen 18 per cent to Rs 5.75 lakh crore in 2013–14 from Rs 4.86 lakh crore in the pre­vi­ous year.

We have noticed con­sid­er­able delay at var­i­ous stages on the part of com­mis­sion and income-tax depart­ment as a num­ber of appli­ca­tions filed pri­or to June 2007 are still pend­ing with the com­mis­sion for dis­pos­al,” the CAG report said. “Besides, I‑T depart­ment took con­sid­er­able time in sub­mis­sion of required reports to the com­mis­sion and giv­ing effect to the orders of com­mis­sion,” the report said.

Out of the total out­stand­ing tax demands, Rs 2.18 lakh crore was locked up in appeals with the I‑T com­mis­sion­er, Rs 1.80 lakh crore in lit­i­ga­tions with high­er courts, it said. The issue of rise in uncol­lect­ed tax demands has been cit­ed as an exam­ple of aggres­sive tax prac­tices large­ly aimed at show­ing high­er tax col­lec­tions to meet bud­get­ed targets.
Source: Eco­nom­ics Times

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