Govt asks tax officials to go slow on refunds

To check the widening fiscal deficit the government has asked tax authorities to go slow on refunds.

Updated: Jun 26, 2012, 21:31 PM IST

Zeebiz Bureau

New Delhi: To check the widening fiscal deficit the government has asked tax authorities to go slow on refunds.

In the current situation when everything is going bad for the government, the tax commissioners have been asked to inflate tax collection figures by slowing down on refunds.

In the Income tax commissioners meeting this month finance secretary R S Gujaral has asked tax commissioners to be slow in refunds this year.

A Zee Business-Assocham survey did on over 200 companies validates this. The survey suggests over 92% companies get their refund delayed by over a year.

Only 1 percent says they got their refund in three months time. Over 37 percent of the companies are not satisfied with the reasons given by the tax authorizes for delay in refunds, 27 percent feel authorities intention is only to harass companies, while 25 percent companies say tax officials asks for bribes to expedite refunds.

In answer to another querry 36 percent companies says that tax officials are corrupt, while 38 percent say they are rude and uncooperative. Over 50 percent of the companies surveyed feel process of tax refund is very bad in India. On the amount of refund dues 22 percent companies says they have refund due of over Rs 10 crore each.

The first two months of fiscal 12-13, direct tax refund given was Rs 16900 crore compared to last fiscals Rs 37500 crore, which is 54 percent less than the last year. In 2010-11, 80 lakh cases of refund and refund amount was 74000 crore rupees. In 2011-12, approximately one crore cases and refund was about Rs 95000 crore rupees.

Also over 24000 cases involving over Rs 1925 crore is pending with the department of indirect tax refunds. This shows tax authorities intentionally delay refunds to artificially show meeting the tax targets.

In the Mumbai LTU unit tax disputes cases are over 15,400 and it involves Rs 922 crore. Companies like Bajaj Auto, Glenmark Pharma, IPCA lab etc. are involved. In Chennai zone refund pending is of Rs 447 crore, involving over 2700 cases. In Hyderabad zone refund cases pending of over 2200 companies involving Rs 144 crore. Bhuwneshwar zone has 74 cases involving Rs 55 crore

In Mumbai custom zone refund cases disputes are pending of companies like Oman Refinery, ABB, Suzlon Energy etc.

In Chennai service tax refunds are pending of Motorola, Vokswagon, Flextronics and many more.

Bhuwneshwar excise zone refund cases are pending of Vedanta resources, Jindal steel and SAIL among many others. Bhuwneshwar custom zones has disputes with Se sa Goa, Jindal Steel and Power among many

In Hyderabad zone major refund cases are of Aurbindo Pharma and Dr Reddy’s among many others.

The Industry is worried and says even the electronic delivery system of tax refund is ineffective if such directives are passed by the government. When the economy is going on a slowdown and growth rate is sinking, rupee weakening such refund delays will further worsen the conditions of Indian corporates.