Skeletons continue to tumble out of comml tax dept closet

Hyderabad: Lack of required staff, outsourcing the management of IT applications, including the tax collection data and no full-time Minister to regularly monitor the Commercial Taxes department has put the state’s highest revenue generating wing in disorder. The mismanagement of the entire department is affecting the GST collections and failing to achieve the revenue targets every year. Evasion of taxes and scams in the Input Tax Credit (ITC) are common in the department.

It may be mentioned here that the recent ITC scam unearthed by the probing agencies had disclosed the role of outsiders, mainly Sobhan Babu, an Assistant Professor at the Indian Institute of Technology (IIT)-Hyderabad and Plianto Technologies, a technology partner of commercial taxes. Former Chief Secretary Somesh Kumar allegedly played a key role in the entire scam with the help of some officials and the hired technology partners.

The CAG report also found errors in the GST and VAT collections related to ITC of Rs 7,589 crore. It analysed mismatches of Rs 247 crore in ITC availed and tax payments. The report said that many companies did not file GST returns and the Commercial Taxes department officers did not issue notices. “Some companies did not make payments. In some instances, companies submitted wrong calculations in the returns in the suburban circles, including Hyderabad City. Even if there is a mismatch, the authorities could not detect it during scrutiny and did not act on it,” the report said.

Shortage of efficient commercial tax officers in the department is one of the main reasons for not preventing the scams which have been reported for the last six years. After the GST Act came into force in 2017, the Commercial Taxes wing was supported to be strengthened. The previous government did not focus much on recruitment and also the development of advanced IT applications to check evasion of tax payments and submission of wrong annual filings by some companies. “The entire department is still facing a workforce crunch. As a result, the vigilance wing could not focus much on preventing irregularities,” a senior official said, adding that the Commercial Taxes wing should have been given much importance since it was the only big revenue generating wing in the State.

The key wing was also being held by the Chief Ministers in the previous and the present government. Since the CMs were busy with other state issues, the department has been losing its importance in its efficient functioning for almost seven years. “Former CM K Chandrasekhar Rao used to hold a review on the performance of the wing once in two months. Now, Chief Minister A Revanth Reddy is focused on strengthening the wing but due to his busy schedule, the top officials of department were able to meet the CM hardly once a month.”

Officials said that the Chief Minister has set some targets to the Commercial Taxes wing but the mechanism was not supportive to address the issues in the last seven months. “The entire department needs to be revived to achieve the annual revenue targets and the CM should take many initiatives by holding regular meetings,” the official said.