Govt hopes to mop up Rs 2,000 cr before GST

Sushil Manav

Tribune News Service

Chandigarh, June 25

The one-time-settlement scheme (OTS) launched by Haryana is being seen as a smart move to mop up overdue taxes of about Rs 2,000 crore ahead of the launch of the Goods and Services Tax (GST) so that it is not denied compensation by the Centre due to false increase in revenue collection after July 1.

Under the scheme, “Haryana One Time Settlement Scheme for recovery of Outstanding Dues, 2017”, a person opting for the settlement of outstanding dues will have to pay the full amount of tax, but he can avail of 90 per cent waiver on interest amount and up to 75 per cent waiver on penalty if he applies on or before June 28.

Sources say that the state government is expecting a collection of over Rs 2,000 crore under the scheme before the GST regime comes into play on July 1. The amount includes Rs 1,800 crore payable by the Indian Oil Corporation (IOC) as entry tax since 2008, which was not paid because of pending litigation before the Supreme Court.

The Supreme Court has ruled in favour of the state government and sources say that the IOC has itself approached the government as it wants the issue to be resolved.

Under its agreement with state governments, the GST Council is to compensate states if their revenue growth of all taxes subsumed in the GST (entertainment tax, luxury tax, local area development tax, entry tax, VAT and sales tax) is less than 14 per cent as compared to their revenue base of 2015-16.

If this Rs 2,000 crore, which the government is expecting to recover under the scheme, comes after July 1, it will jack up its revenue collection for the period and hence deny Haryana compensation from the GST Council to this extent.

The sources say that at present more than Rs 3,900 crore in form of taxes is under appeals in tax tribunals and the Punjab and Haryana High Court while with regard to nearly Rs 2,700 crore, the High Court has restrained the state from using coercive means for recovery.

Sanjeev Kaushal, Additional Chief Secretary (Excise and Taxation), admits that the scheme will obtain the twin objective of mopping up arrears also in the eventuality of the revenue collection being short, making the state eligible for compensation from the GST Council.

“We have assigned two districts each to senior officers of the rank of additional excise and taxation commissioner and joint excise and taxation commissioner so that they can exhort people to avail of the benefit of the scheme by holding meetings of traders and tax bar associations,” Kaushal adds.