Tax officials propose to adopt a carrot-and-stick approach to recover around Rs 18,000 crore (Rs 180 billion) of undisputed arrears during the current fiscal.

The task forces on recovery of undisputed arrears for direct and indirect taxes, which submitted their reports to the finance ministry, have recommended various measures to recover outstanding taxes.

The authorities have also factored in the possibility of some assessees approaching the courts in the coming days to prevent action from the revenue department.

The total arrears of the Centre are estimated at over Rs 103,000 crore (Rs 1,030 billion), of which Rs 15,000 crore (Rs 150 billion) pertain to indirect taxes.

Finance Minister P Chidambaram has fixed a target of Rs 3,000 crore (Rs 30 billion) for recovery of indirect taxes during the current fiscal.

While recommending individual targets for all field formations, the task force on indirect taxes proposed that officials involved in the recovery drive hold individual meetings with the top management of companies that had dues of over Rs 50 crore (Rs 500 million).

It also favours offsetting of arrears against refunds of central excise duties. Forwarding of certificates to the district authorities concerned for realising arrears through land revenue is also being considered.

There is also a proposal to auction stocks of excisable goods for recovering some of the dues. Officials said yet another option was to attach movable and immovable assets of companies that owed taxes to the government.

The revenue department is also asking its field formations to pursue cases pending in courts more actively and ask for stay orders to be vacated or modified.

Officials said the recovery of Customs dues posed a bigger hurdle as a large amount was locked up in cases where the assessees had vanished or had obtained stay orders from courts.

"To complicate matters further, we cannot act against companies that have been referred to the Board for Industrial and Financial Reconstruction or whose assets have been taken over by lenders or debt recovery tribunals," an official said.

Proposals for recovery of tax dues

• Arrears can be offset against refunds of central excise duties
• District authorities may be asked to realise arrears through land revenue
• Stocks of excisable goods may be auctioned to hasten recoveries
• Another option is to attach movable and immovable assets of companies that are yet to pay tax arrears