As of December 31, 2024, India’s total tax arrears amount to ₹42.64 lakh crore, with ₹41.63 lakh crore in direct tax arrears and ₹1.01 lakh crore in indirect tax arrears. To recover these dues, the Central Board of Direct Taxes (CBDT) has established a Demand Facilitation Centre and set targets for tax collection. Measures include litigation management, appeal rectifications, demand segregation, and monitoring high-value cases. Tax authorities use data profiling and asset identification for recovery. The Central Board of Indirect Taxes and Customs (CBIC) has issued a Master Circular directing each Commissionerate to have a dedicated Tax Recovery Cell, headed by senior officers, for systematic recovery monitoring. Recovery tools include auctioning defaulters’ assets, utilizing guarantees for duty-free imports, publishing defaulters’ names, and offering incentives for officials and informers aiding in recovery efforts.
Government of India
Ministry of Finance
Department of Revenue
LOK SABHA
UNSTARRED QUESTION NO. 217
TO BE ANSWERED ON MONDAY, FEBRUARY 3, 2025/MAGHA 14, 1946 (SAKA)
RECOVERY OF TAX ARREARS
217. DR. C M RAMESH:
Will the Minister of FINANCE be please to state:
a. whether it is a fact that the tax arrears of the country has been reached to Rs. 47 lakh crores which constitutes 14 per cent of the GDP;
b. if so, the details thereof; and
c. the efforts being made by the CBDT, CBIC and legal cells of the Government to recover tax arrears?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b) : The quantum of direct tax arrears is Rs.41,63,435 crore and indirect tax arrears is Rs.1,01,332 crore as on 31/12/2024.
(c): Following steps have been undertaken by CBDT for tackling the direct tax arrears:
(i) Demand Facilitation Centre (DFC) for facilitation of arrear demand management has been set up.
(ii) Monitoring the arrear demand reduction in respect of top 5000 cases of arrear demand in all the jurisdictions.
(iii) Targets have been given to field formations for annual cash collection and reduction of the demand.
(iv) Specific steps have been outlined such as litigation management, appeal/ rectification effects, demand segregation, etc.
(v) Efforts of the assessing officer to collect/recover the outstanding demand are regularly reviewed/monitored by the superior authorities.
(vi) Databases like Individual Transaction Statement and 360-degree profile generated by the Department and those maintained by other agencies like FIU-IND have been made available to the field units for identification of assets for recovery.
(vii) Guidelines for Tax Recovery Officers for recovery and guidelines to filed authorities for dealing with stay petitions have been issued.
CBIC has issued Master Circular No. 1081/02/2022-CX dated 19.01.2022 for recovery of tax arrears. As per the said circular “There should be a dedicated ‘Tax Recovery Cell” headed by a Joint/ Additional Commissioner level officer in each Commissionerate. The monitoring of arrear recovery shall be done by the Jurisdictional Pr. Commissioners/ Commissioners on monthly basis and the progress shall be monitored by the Zonal Principal Chief Commissioner/ Chief Commissioner.”
Some of the tools of recovery adopted by CBIC are as under:
i. Detain and auction movable/immovable properties of defaulters under Customs and Central Excise Acts.
ii. Utilize guarantees provided for duty-free imports to offset arrears.
iii. Publication of Defaulter Names:
iv. Guidelines for publishing names under Section 37E of the Central Excise Act, 1944
v. Incentives for officials and informers aiding recovery efforts.
