Maharashtra State passed legislation to waive pre GST tax arrears

The Maharashtra legislature passed a bill to provide for the payment of tax, interest, penalty, or late charge arrears that were due prior to the implementation of GST.

Finance Minister Ajit Pawar stated that this step will benefit small businesses, traders, and other dealers who have endured financial hardship as a result of Covid-19.

“There are a considerable number of cases concerning overdue dues and litigations pending.” Mr. Pawar stated that “the government deems it expedient to provide for a plan for settlement of arrears of tax, interest, penalty, or late fee in order to unlock the amount involved in the outstanding dues and minimise the old existing litigations.”

With effect as of April 1, 2022

The Maharashtra settlement of tax, interest, penalty, or late fee act, 2022, will take effect on April 1. Between April 1 through September 30, individuals and corporations could pay their arrears. Arrears of Rs.10,000 or less per financial year shall be written off if they are defined by legislative order for a specific period as of April 1. Mr. Pawar stated that “more than one lakh traders will gain.”

People having arrears of less than Rs.10 lakh would opt for a lump payment of 20% of the dues. If this is the case, 80 percent of the fee will be waived, benefiting almost 2.20 lakh dealers. “The plan protects revenue in the case of undisputed tax by providing an incentive to partially forgive disputed tax, interest, penalty, or late charge. The option of paying the fee in instalments has been granted for larger dealers who are encountering financial difficulties,” the minister observes. The bill is passed by both the assembly and the official.