3rd tax dispute settlement scheme in 4 years

KOLKATA: Buoyed by the success of two dispute settlement schemes in 2017 and 2018, state finance minister Amit Mitra on Monday again rolled out such a scheme for VAT, central sales tax (CST) and entry tax in this year’s budget. The new scheme will help taxpayers settle VAT, CST cases by depositing 25% of the disputed tax by March 31, 2020. This will help state achieve its self revenue generation target of Rs 70,807 crore.
For taxpayers, who are not able to avail this facility, the scheme provides the option of payment of 25% of half of the disputed tax before March 31, 2020. On the balance half, they will need to pay 30% in maximum six monthly instalments from April 2020. “I am happy to inform that in December 2018, the settlement of dispute scheme, which I had introduced, benefited more than 30,000 taxpayers and Rs 1,120 crore arrears disputed tax was collected. Still, more than 25,000 cases are pending. I propose to introduce a new and more attractive scheme,” he said. Incidentally, before the GST roll-out also, the state had come out with such a scheme for entry tax. The state had mopped up Rs 950 crore of pending entry tax from traders and corporates during a special settlement window in June 2017.
According to estimates by commercial tax officials, total amount of entry tax due to the state at that time was Rs 2,450 crore. Besides, there were VAT and CST dues. All taken together, the amount could have been over Rs 3,500 crore. As per conservative estimates, the remaining dues in all heads taken together could have been well over Rs 1000 crore. In the current scheme, the state has offered a different amnesty for entry tax dues. As per the budget for entry tax only the admitted tax needs to be paid within March 31, 2020. “For those who are unable to avail this facility, the scheme allows payment of 50% admitted tax within March 31 and balance 50% with nominal interest in six instalments,” said a source.
Incidentally, the West Bengal Entry of Goods into Local Areas Act, 2012 was passed in the Assembly in March 2012, under which 1% tax was levied on specific goods entering Bengal and the tax was compensatory in nature. In the first year of roll-out, collection from entry tax was Rs 900 crore that rose to Rs 1,200 crore next year. But, a petition challenging the constitutional validity of the act was filed in 2012-end by several firms.
Indian Chamber of Commerce president Mayank Jalan feels the schemes will help them settle old disputes and litigations and focus on growing businesses. Chairman of FICCI, eastern region, Rudra Chatterjee pointed out that a policy for resolving long pending VAT and sales tax disputes is a welcome move since they may unblock investments that are held up and bring resources to the exchequer. Rishabh C Kothari, vice president of Merchants Chamber of Commerce, said the scheme would help both government and companies to gain closure on long-pending disputes from a different tax regime.