Punjab yet to bring scheme to settle legacy tax issues

Vijay C Roy

Tribune News Service

Chandigarh, January 24

After the implementation of goods and services tax (GST), Gujarat, Kerala, Karnataka, Maharashtra, Madhya Pradesh and even northern states, such as Haryana, Rajasthan and Himachal Pradesh, introduced settlement schemes to settle legacy tax issues. However, Punjab is yet to introduce any such scheme.

The scheme introduced by these states addresses settlement of legacy cases under general sales tax, VAT and other taxation laws, which were subsumed under GST.

The scheme was introduced to expedite the disposal of the legacy issues, resulting in generation of revenue stuck due to non-disposal of assessment cases or arrears under litigation. Secondly, it was felt that it would help release considerable manpower engaged in legacy issues and make available more manpower for improving compliances under GST.

In the last year Budget, even the Central Government introduced Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), with an intention to focus on GST by clearing all litigations and cases pending at various fora with respect to previous tax regime, especially the central excise and service tax. The scheme was closed on January 15. It was launched also with a view to de-stress the courts by way of reduction in the long-pending disputes.

The Central and state schemes have provided certain immunities and incentives to the applicants. The Central Government under the scheme has provided waiver of tax dues ranging from 40 per cent to 70 per cent along with complete waiver of penalty and interest and waiver from prosecution.

Further, Maharashtra has provided 50 per cent waiver of tax amount, 90 per cent waiver of penalty and 95 per cent waiver of interest. Also, Karnataka has granted waiver of 100 per cent of arrears of penalty and interest.

Last week, Himachal approved the Himachal Pradesh (Legacy Cases Resolution) Scheme. Under the scheme, the declarant is required to pay settlement fee for settling a legacy issue at the rate of 10 per cent of tax paid in case returns or tax is late; 110 per cent of the tax due where no return has been filed and where the statutory form (C, F, H, etc.) are involved and have not been produced. The fee would be 1 per cent of the value of such form or 100 per cent of the tax required to be paid against such forms whichever is higher.

On being asked if Punjab has any plan to introduce such a scheme, a senior official in the excise department informed, “We are working on the modalities and the scheme pertaining to legacy issue is at a conceptual stage.” “The government must bring out such a scheme to resolve legacy tax issues. The cases where “C” form has not been produced, especially in case of Jammu & Kashmir, the government should allow to be deemed assessed by the assesses,” said Piara Lal Seth, general secretary, Shawl Club (India).

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