Forum suggests third party audit of ’16-17 tax collection

Shivani Bhakoo

Ludhiana, July 18

In Punjab, it seems, small towns outperform cities in terms of tax collection. According to data obtained by the All Industries and Trade Forum (AITF) through an RTI, small towns have shown a greater interest in collecting old VAT arrears, whereas cities appear to have focused solely on issuing notices.

There is a serious concern that, despite regular notices to taxpayers, the big cities fail to meet the desired targets. — Aitf president

The State GST Department was asked to provide information on how much tax, interest and penalty the department collected in various cities during the years 2016-17, 2017-18, and 2018-19. A reading of the report revealed many unexpected details.

Hoshiarpur, a small town, collected more taxes in 2016-17 than all of the state’s districts combined. The State GST Department in Hoshiarpur collected Rs 112.88 crore in revenue, with 51 crores collected as tax, Rs 53.47 crore as interest, and Rs 8.27 crore as penalty, while the rest of the districts did not come close.

According to data provided by 16 Assistant State GST Commissioners from various cities, Mansa collected Rs 29.11 crore, Moga Rs 16.36 crore, Patiala Rs 15.28 crore, Kapurthala Rs 13.99 crore, Tarantaran Rs 13.48 crore, Ludhiana District-1 Rs 6.92 crore, and Fazilka Rs 4.82 crore in 2016-17. Barnala collected only Rs 55 lakhs, Shaheed Bhagat Singh Nagar Rs 3 lakhs, Ferozepur Rs 12.38 lakhs, Faridkot Rs 4.4 lakhs, and Shri Muktsar Sahib Rs 12,000. According to the AITF, based on its analysis of the RTI, in subsequent years, tax collection dropped further.

“There is a serious concern that, despite regular notices to taxpayers, the big cities fail to meet the desired targets,” the AITF president said.

According to the RTI, in 2023-24, Ludhiana District-1 issued the most notices to 7,632 businessmen, followed by the State GST Department of Sahibzada Ajit Singh Nagar, which issued 3,248 notices; Shri Muktsar Sahib, which collected only Rs 12,000 in tax, issued 1,366 notices, Patiala issued 1078 notices, Moga 951, Faridkot 918, Fazilka 663, Mansa 579 and Hoshiarpur, the highest tax collector, issued only 502 notices.

In a letter to the Chief Minister, the AITF president said issuing ‘useless’ notices would not help the government collect more tax as revealed by the data.

The Assistant State GST Commissioners of the more populous districts refused to provide the requested information, citing noncompliance with the RTI Act. These districts include Ludhiana-2, Ludhiana-3, Ludhiana-4, Jalandhar-1, Jalandhar-2, Gurdaspur, Sahibzada Ajit Singh Nagar and Bathinda.

The All Industries and Trade Forum said that errors might have occurred during the assessment in 2016-17. As a result, the forum is calling for a third-party audit of large assessment cases to determine why tax collection in many cities decreased in 2016-17 compared to smaller towns.