Indore: ‘Encash FDRs to unblock traders’ money’

Indore (Madhya Pradesh): The adage “old habits die hard” seems to be perfect in this scenario.

Even as some rules regarding sales tax, commercial tax and value added tax are outdated and defunct, old cases are still pending mired in these “inactive” cases.

Though these laws are archaic, the joint fixed deposit receipts (FDRs) made under the laws still exist and have not been encashed. Together, the joint amount would be to the tune of over Rs 200 crore involving over 8 lakh traders across the state.

The amount of the FDRs ranges from anything between Rs 500 and Rs 1 lakh from the parties.

WHAT WERE THESE FDRs FOR?

The purpose of making these FDRs was to allocate the fund as caution money. Ashwin Lakhotia, president of MP Tax Law Bar Association, argues that since these Laws are outdated following the roll-out of Goods and Service Tax (GST) from July 1, 2017, and most of the laws have been subsumed in the GST, thus there’s no need for these FDRs.

Through these FDRs, the money of traders is lying blocked in these financial instruments unnecessarily. He suggests that if there is any due under those laws against any trader from the department, following the deduction of dues, the remaining amount of the FDRs should be credited to the accounts of the traders and the chapter should be closed.

Lakhotia said these FDRs were made jointly by the then departments like sales Tax, commercial tax and VAT along with the traders.

Senior tax consultant Lakhotia goes on to say, “We have drawn the attention of the state GST commissioner, Lokesh Kumar Jatav, to look into the matter and resolve the cases ASAP.

Published on: Wednesday, December 21, 2022, 07:51 AM IST