HYDERABAD: In a bid to accelerate commercial tax collections and plug legal loopholes that allow prolonged delays, the state government is working on a comprehensive policy framework to enable swift action against Goods and Services Tax (GST) defaulters, including initiating proceedings within the same assessment year if mandatory tax payments are not made, official sources said.
As per Section 73 (10) of The Telangana Goods and Services Tax Act, 2017, the official concerned can issue an order within three years from the due date for furnishing of annual return for the financial year to which the tax was not paid or short paid or input tax credit was wrongly availed. This provision was borrowed from the Central Goods and Services Tax Act, 2017, and the government aims to amend this.
“Now this provision gives a three-year window for tax defaulters. Even in the cases of issuance of notices, and Speaking Orders, the tax defaulters have a legal remedy to further delay the remittance of tax. They can challenge the orders in tribunals, and appeal to a court of law, which takes a long time,” said a senior official, speaking on the condition of anonymity.
The proposed approach seeks to eliminate the existing practice of waiting up to three years to settle tax liabilities, under which dues for 2025 could legally be finalised up to by 2028 — a window that often allows dealers to delay payments by resorting to appeals before tribunals and the high court.
As part of the intensified enforcement drive, the Commercial Taxes Department is preparing to issue legally robust notices that can withstand judicial scrutiny to nearly 20,000 dealers who failed to pay taxes for the year 2021 by exploiting gaps in the law. Officials said notices are being drafted carefully to ensure they remain valid even if challenged in court of law.
The state Commercial Tax Department is in the process of issuing about 20,000 tax demand orders relating to the year 2021–2022 alone, with the potential revenue involved estimated at around `1,000 crore, as the government sharpens its focus on boosting GST mobilisation through quicker recovery mechanisms.