In a significant step toward reinforcing fiscal discipline and strengthening tax administration, the Government of Odisha has introduced a new, technology-enabled GST Recovery Mechanism integrated into the Works and Accounts Management Information System (WAMIS). This initiative, notified through an Office Memorandum No. 2579 dated 31st January 2026 by the Finance Department, aims to ensure efficient, transparent, and system-driven recovery of outstanding Goods and Services Tax (GST) dues from works contractors engaged in Government projects. The decision comes in response to widespread inconsistencies observed in contractors’ GST compliance, including non-filing of returns, under-reporting of turnover, and misuse of refund systems, which have led to substantial revenue losses for the State.
Legal Backdrop: Section 79 as the Framework for Enforcement
The new mechanism draws its authority from Section 79 of the Odisha Goods and Services Tax (OGST) Act, 2017, which provides the legal foundation for the recovery of unpaid tax dues. This section empowers Proper Officers to recover tax, interest, penalty, fees, or any other amount due under the Act when a taxpayer fails to pay within the prescribed time frame. Section 79 enumerates multiple methods of recovery, including deduction from government dues, attachment of property, garnishee proceedings, and recovery as arrears of land revenue. The memorandum notes that these provisions become applicable only when a demand is crystallised, duly served on the taxpayer through Form DRC-07, and remains unpaid beyond the statutory period without any stay from an appellate authority.
The Compliance Gap: Persistent Defaults by Works Contractors
The Finance Department observed that a considerable number of works contractors across various Departments have been defaulting in discharging their GST liabilities, despite having received substantial payments from the Government. The types of defaults include non-filing of returns, filing NIL returns despite receiving work payments, and substantial under-reporting of turnover relative to payments released by Departments. Such discrepancies highlight deliberate evasion as declared figures fail to match the actual billing information available with Government divisions. Upon detection, demand orders are raised by the CT & GST Commissionerate; however, traditional recovery methods, particularly bank account attachments, have often yielded poor results due to insufficient balance in contractors’ accounts.
Need for a Systemic Approach: Leveraging WAMIS for Recovery
Given these limitations, the Government decided to institutionalise recovery by intercepting future payments processed through WAMIS, the end-to-end application used by all Government departments for processing and issuing payment orders for works contract services. This integration allows the State to secure outstanding dues directly at the payment source rather than relying on manual follow-up or external attachments. Since all works-related bills flow through WAMIS and then through IFMS for payment release, this mechanism ensures complete visibility and enforceability of recovery orders across all Departments and Divisions statewide.
Key Features of the New GST Recovery Module
The newly developed module within WAMIS introduces a structured, automated, and verifiable means of deducting pending GST dues from contractors’ bills. The major functionalities include entry of GST attachment orders, automated deduction at payment stage, ledger maintenance, and audit trails. Each recovery entry captures essential taxpayer details such as GSTIN, PAN, demand order reference number, detailed tax components (CGST, SGST, IGST), and uploaded copies of DRC-09 or DRC-13 recovery orders. The system also provides role-based access for officers of CT & GST Circles and technical teams for monitoring, ensuring controlled and accountable operations.
Automated Deduction at Bill Processing Stage
A landmark feature is the automated deduction mechanism. When any Division processes a works bill for a contractor, WAMIS automatically checks for pending recovery orders linked to the contractor’s PAN or GSTIN. If an outstanding amount exists, the system ensures mandatory deduction—partially or fully depending on the bill value—before the bill can proceed. These deductions are temporarily parked under designated recovery Heads of Account (HoAs) in Part-V. This rule is enforced systematically, ensuring that no payment bypasses the recovery order and eliminating chances of manual oversight or non-compliance by officials.
Priority-Based Recovery Structure
To maintain fiscal discipline and fairness, WAMIS follows a strict sequence of recovery, prioritising essential statutory dues. The order begins with statutory deductions such as IT TDS, GST TDS, and royalty, followed by recovery of OGST/CGST tax dues, IGST dues, interest, penalties, fees, and any other dues. This structured priority ensures that the most critical revenue components are recovered first, aligning with the legal framework provided under Section 79.
Provision for Partial Deductions and FIFO Priority
In scenarios where the bill amount available after statutory deductions is insufficient to cover the recovery amount, WAMIS initiates partial recovery on a pro-rata basis. This ensures that no opportunity for recovery is missed. Furthermore, in cases of multiple recovery orders, the system applies the FIFO (First-In-First-Out) method, ensuring chronological adherence to pending recovery orders and maintaining transparency in prioritisation.
Real-Time Recovery Ledger and Transparency
Post-deduction, WAMIS updates the contractor’s Recovery Ledger, displaying both the recovered amount and the remaining balance. This ledger is accessible to CT & GST officers and concerned Divisions, offering real-time visibility into recovery progress. This transparency prevents duplication of recoveries and provides officials with a clear record to support legal, audit, and departmental reporting requirements.
Seamless Integration with IFMS for Booking of Recoveries
To ensure proper financial classification and accounting, IFMS has been customised to receive additional bill and recovery-related details from WAMIS. IFMS will now maintain contractor-wise and GSTIN-wise records of recoveries processed and store them under a master list of designated HOA IDs for CGST, OGST, IGST, interest, penalty, and other components. This linkage ensures audit readiness and traceability, supporting the Government’s commitment to transparent and accountable financial management.
Post-Recovery Processes and GST Portal Integration
Once the recovered amounts are deposited into the designated Heads of Account through the Treasury, the system notifies the respective Tax Recovery Officer (TRO). This notification triggers the next step—setting off the recovered amount in the taxpayer’s Electronic Cash Ledger through the GST Back Office system. To avoid delays and prevent misuse, the system will also generate alerts prompting immediate ledger adjustment. In the case of partial recoveries, TROs will update the ledger proportionately until the entire demand is settled.
Clear Roles and Responsibilities for Seamless Execution
To ensure smooth execution, the Government has defined the roles of all stakeholders involved:
Nodal Officers of CT & GST Circles
- Upload recovery orders in WAMIS
- Coordinate with Tax Recovery Officers
- Monitor the WAMIS recovery dashboard daily
- Validate modifications or withdrawal of recovery orders
Tax Recovery Officers
- Deploy WAMIS as the last resort after exhausting other recovery modes
- Communicate detailed breakup of recovery components
- Set up recovered amounts in cash ledger immediately
- Ensure taxpayers do not misuse deducted amounts
Bill Processing Officers (SO/SDO/DO)
- Ensure mandatory deduction before bill approval
- Maintain component-wise accuracy
- Transfer recovered amounts to GST portal using Hand Receipt Bills
- Continue deductions across subsequent bills until recovery completes
MIS-Driven Oversight and Administrative Monitoring
The module incorporates a comprehensive MIS (Management Information System) reporting feature. It provides taxpayer-wise recovery details, division-wise deductions, pending balances, and monthly progress data. Higher administrative authorities will have access to consolidated dashboards, enabling policy monitoring, performance evaluation, and intervention where required. This aligns with the State’s push toward data-driven governance.
Inter-Departmental Coordination for Statewide Rollout
To ensure uniform statewide implementation, the Office Memorandum has been circulated to major Departments including Works, Water Resources, Housing & Urban Development, Forest & Environment, Rural Development, and Panchayati Raj & Drinking Water, along with oversight institutions such as the Accountant General and Director of Treasuries. This coordinated dissemination ensures that every Department processing works bills applies the new recovery mechanism consistently.
Conclusion: A Critical Reform Strengthening Fiscal Governance
The introduction of the GST Recovery Module in WAMIS marks a significant leap in Odisha’s efforts to strengthen tax governance, protect revenue, and enforce legal compliance. By leveraging digital infrastructure, real-time validation, and automated deduction mechanisms, the State has created an efficient, transparent, and enforceable system that minimizes leakages and maximizes recovery efficiency. Issued under the orders of the Governor of Odisha, this initiative reinforces the Government’s broader vision of modernizing financial administration and ensuring that public funds are utilized responsibly and lawfully.
The Office Memorandum can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/02/Guidelines-relating-to-recovery-of-tax-due-from-works-contractor-through-WAMIS-module.pdf
