As the government had failed to credit the tax amount, there is speculation that state coffers ran dry. Most of the tax amount is related to tax deducted at source (TDS) from employees’ salaries.
Under normal circumstances, the state government pays IT even if there is a delay by a couple of months by making book adjustments through AG account. However, this time, the government could not pay IT. While PSUs like NMDC, SSCL, Andhra Bank, SBH and Rashtriya Ispat Nigam Ltd stood as top five IT payers, the state paid nothing to the IT department.
Now, it has to pay penalty also. A senior IT official dubbed the state an IT defaulter, “The state government is not exempted from penalty on delayed tax payment,” he said. The state government has deducted tax before making salary payments to employees, brokerage and under various other heads. The government should deduct TDS of one or two percent on the value of various civil works like construction of drains, canals etc. The TDS amount must be deposited with the IT department.
Asked for his comment on the state government defaulting in IT payment, finance minister Anam Ramanarayana Reddy told Express: “Such matters will not come to me. I am not aware of it.” The situation was no different in municipalities and civic corporations which were starved of funds.
Another interesting thing is that the APIIC, which was earning money for the government by selling valuable lands, was not paying any tax as the IT department considers it a charity organisation.
