Tax arrears: State Goods and Services Tax department launches stern action against defaulters
The State Goods and Services Tax department has said that it has launched strong action, including recovery measures, against businesses and trade establishments that have failed to settle their tax arrears.
As a first step, the department's Economic Intelligence Division led by Deputy Commissioner Manu Jayan had carried out recovery drives in 35 establishments across the State on May 15.
The State GST department move is aimed at encouraging tax defaulters to participate in the General Amnesty Scheme, 2025, announced in the 2025-26 State Budget for settling their arrears. Meant for arrears under pre-GST era laws, the deadline for joining the scheme ends on June 30 this year.
Stern measures will be initiated against traders who fail to remit their taxes and ignore amnesty schemes that are announced from time to time by the State government, department officials said.
The Kerala GST Act contains provisions for treating arrears under the pre-GST laws as arrears under the GST Act. Once this is done, the department can treat the funds in a trader's GST ledgers as arrears, and initiate recovery measures. For recovering the arrears, the department is also empowered to freeze amounts due to the trader from the government and other sources, and deposits in banks and other financial institutions, SGST officials said.
Arrears, if any, can also be recovered from the defaulter's investments in the share market, insurance policies or by initiating revenue recovery steps on property held by the business concerned, they said.
Besides these measures, the department is also considering, under Section 159 of the Kerala GST Act, making public the details of individuals who have deliberately run up arrears on tax payments.
The General Amnesty Scheme, 2025, allows defaulters to settle the arrears by remitting the principal amount with full exemption on interest and penalty.
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