Amnesty extended in Kerala for excise arrears

Time of India

17 hours ago

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T'puram: The govt has once again chosen to extend the amnesty scheme for excise arrears, offering defaulters in liquor business sweeping waivers and more time to pay even as the state's revenue arrears stood at a staggering Rs 28,258.29 crore — 24.23% of Kerala's total revenue — as flagged by the Comptroller and Auditor General (CAG) in 2023.
Critics say the move reflects a pattern of periodic bailouts rather than serious enforcement.
A fresh order issued by the taxes department extends the window for filing applications until Dec 31, 2025. Payments can now be made until by March 31, 2026. The earlier deadlines were June and Sept 2025.
The amnesty framework for excise arrears was first introduced through various govt orders and remained in force till March 31, 2017.
It was revived on the excise commissioner's recommendation. Fresh extensions followed — first up to July 2023 for applications and Dec 2023 for payments; later up to June and Sept 2025; and now to Dec 2025 and March 2026.
The concessions remain substantial: Arrears between 1949 and 1996 can be settled by paying just 75% of the principal; those between 1996 and 2001 with 90%; and dues between 2001 and 2012 with 100% of the principal alone, with all accumulated interest and penalties written off.
However, arrears relating to distilleries, blending units, pharmaceuticals and the Kerala State Beverages Corporation's establishment costs are excluded from the scheme.
The order lays down detailed procedures. Once an application is filed, the excise commissioner is required to calculate the payable amount within 15 days. The applicant must remit at least 25% of the demand within 30 days, with the balance to be cleared in a maximum of three instalments by the final deadline.
Applicants must also withdraw all related court cases and submit an affidavit on stamp paper undertaking not to initiate fresh litigation.
Despite these repeated relaxations, the response has been weak so far. Only 60 applications have been received, resulting in collections of Rs 2.82 crore. Excise officials now hope that the extended window might bring in another Rs 2 crore — a figure that appears meagre against arrears running into tens of thousands of crores.
The CAG report, tabled in the assembly in Sept 2023, warned that the absence of prompt reporting and lax follow-up by departments caused massive pendency. Among 17 departments with arrears, the state GST department alone accounted for Rs 13,410.12 crore, followed by Rs 5,979.91 crore in the finance department's interest receipts. Of the total arrears, Rs 6,267.31 crore — a third — was pending under stay orders. With nearly three years having passed since that audit, the real burden is likely to be even higher now.
Against this backdrop, the latest extension has sparked criticism that the state is prioritising short-term cash flow over accountability. Far from being a one-time recovery tool, the amnesty scheme has become a recurring feature, allowing powerful liquor contractors and firms to escape stringent dues while undermining compliance by genuine taxpayers.
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