Tax Arrears: State GST Department Cracks Down on Defaulters

The State Goods and Services Tax (GST) department has launched a strict crackdown on businesses and traders who failed to clear their tax arrears.

As a first step, the Economic Intelligence Division, led by Deputy Commissioner Manu Jayan, conducted recovery drives at 35 establishments across Kerala on May 15.

The department aims to push defaulters to take advantage of the General Amnesty Scheme 2025, announced in the State Budget for 2025–26. The scheme, which covers arrears from pre-GST laws, is open until June 30.

Officials warned that the department will take strict action against those who ignore such amnesty offers and continue to withhold taxes.

The Kerala GST Act allows the department to treat older arrears as dues under the current GST system. This lets officials recover amounts directly from GST ledgers. They can also freeze payments owed to the defaulter by the government or third parties, and seize bank deposits or other financial assets.

The department may also recover dues by targeting the defaulter’s stock investments, insurance policies, or even through revenue recovery actions on their properties.

In addition, officials are considering publicizing the names of willful defaulters under Section 159 of the Kerala GST Act.

The amnesty scheme offers full exemption from interest and penalties if defaulters pay the principal amount.