Ekm second only to T’puram in revenue recovery dues

Kochi: Even as the state govt is grappling with a severe financial crisis, about Rs 542 crore remains stuck in arrears due to the long-drawn revenue recovery (RR) process in Ernakulam, Kerala's commercial capital, which used to contribute substantial revenue to the state's finances.
According to data presented in the assembly, Ernakulam, with its arrears of Rs 542 crore, ranks second in the state, following Thiruvananthapuram, which has arrears totaling Rs 818 crore.
Ernakulam has 9,468 pending RR cases, primarily comprising sales tax, motor vehicle tax, agricultural income tax, and miscellaneous government dues, as well as court fines.
Notably, the district needs to recover Rs 410 crore from 3,066 sales tax cases and Rs 13 crore from 4,037 motor vehicle tax cases, making these the largest arrears categories. In contrast, in Thiruvananthapuram, the highest arrears are in miscellaneous govt dues at Rs 402 crore.
The challenge of recovering nearly half of the Rs 542 crore is compounded by legal complications, as 758 cases amounting to approximately Rs 264 crore have court stays on their RR proceedings. Revenue officials said that the RR process is inherently time-consuming due to the necessary procedures, which often involve auctioning off the assets of delinquent taxpayers. However, the auctions sometimes yield no buyers, requiring multiple attempts.
"If there are only a few cases, we can complete the process in a few months. However, if they are piling up, it will be time-consuming," said an RR official.
A sales tax official said the issues related to sales tax arrears stem from various factors, such as disputes over tax assessments and the failure of some traders to submit required documents on time.
"In some cases, traders pay only a fraction of the taxes against the govt fixed rate. When the assessment comes, the tax amount piles up, and the retailer refuses to pay it.
Later, it ends up in court. In other cases, the retailer intentionally refuses to pay tax. Despite our efforts, there are cases where industries, including in the plywood sector, evade tax," said a GST official.
To manage the high volume of RR cases in Ernakulam and surrounding areas, the govt has assigned special tahsildars specifically for revenue recovery in the Kanayannur and Fort Kochi taluks.