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Note scrapping helps state Government recovers tax dues


Centre’s demonetisation move has helped Maharashtra government recover a good amount of long-pending dues by way of local taxes in the past 15 days, especially for the Urban and Rural Development departments as the defaulters were allowed to pay the arrears in scrapped notes, according to senior officials.

While the Urban Development Department netted around Rs. 1,100 crore collection by other departments like Rural Development and Water Resources also picked up during the fortnight, they said.

“The urban local bodies have been facing the problem of chronic defaulters. The recovery of dues was important and significant manpower of the state was involved in litigations. The demonetisation decision gave Maharashtra Urban Development department an opportunity to get the dues cleared as people were willing to pay their outstanding taxes in cash,” UDD’s Principal Secretary Manisha Patankar-Mhaiskar said.

“The proposal (to allow the people to pay the dues in scrapped notes) was moved to the chief Secretary as well as Chief Minister’s office who succeed in getting the Centre’s approval for tax payment,” said Mhaiskar.

“We are collecting the taxes that were due till November 8. Advance tax payment is not allowed,” she added.

There are 26 municipal corporations and around 450 municipal councils and nagar panchayats in Maharashtra.

Similarly, the Rural Development Department also decided to cash in on the opportunity and recover the dues.

“Except for government hospitals and medical stores, the value of old currency notes has become zero. We realised that there is a lot of cash with people and they cannot stand in queue for its exchange. We decided to cash in on it as our dues were virtually non-recoverable,” a senior IAS official of the department said.

“There were hundreds of litigations across the state for various types of tax recoveries but the recovery achieved in last 15 days is way ahead of the other methods routinely used for tax recovery,” he added.

“Another big sector in terms of recovery is rural development, where tax dues of grampanchayats are not recovered for decades. Compared to UDD, there are some 28,000 grampanchayats in the state where the problem is prevalent.

“The department is compiling the figures as last date of payment of property tax and other similar dues is November 24. The final figures will be out in next couple of days,” a deputy secretary of the RDD said.

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