The Tamil Nadu government on Tuesday announced a new Samadhan scheme with waivers and concessions to pave the way for the settlement of the pending tax dues of about ₹25,000 crore, of which a majority are under the erstwhile Tamil Nadu Value Added Tax and other legacy tax legislations.
The new Samadhan scheme, which was announced by the Tamil Nadu Chief Minister MK Stalin at the State Assembly, seeks to put an end to the pending tax arrears, disputes and appeals between the traders and the State commercial tax department.
As GST came into force on July 1, 2017, about 10 acts erstwhile were all subsumed under GST. But the tax arrears, interests and penalties of the previous regime were pending.
The scheme has classified the tax dues under five broad categories — ₹50,000 and below, above ₹50,000 to ₹10 lakh, above ₹10 lakh to ₹1 crore, above ₹1 crore to ₹10 crore and above ₹10 crore.
As per the data available, there are 2,11,607 tax disputes involving 1,42,569 traders. The total tax outstanding amount is ₹24,895 crore.
The new scheme offers a complete waiver of tax arrears, interest, and penalty if the total tax arrears for an assessment year is below ₹50,000, and this is for every assessment year, a move that is expected to give a big relief to the small traders.
“For the first time, a Samadhan scheme has many concessions. Also, traders in the above category will get back their properties, which were attached as part of the disputes. In earlier Samadhan schemes, flat rates of concessions were given - be it dues of ₹50,000 or ₹10 crore. But this scheme has divided into different categories based on the outstanding dues,” B Jothi Nirmalasamy, Secretary-Commercial Taxes and Registration told businessline.
“This is the first-ever waiver scheme offered by any Tamil Nadu government to small traders. This complete waiver option for below ₹50,000 dues will benefit more than 95,000 small traders,” said the Chief Minister.
For the tax dues that fall in the category of ₹50,000-₹10 lakh, traders can just pay 20 per cent of the dues or by paying a portion of the tax, interest, and fine to settle the disputes once and for all. In the other three categories, traders could pay the mentioned portion of the tax, interest, and fine and move out. For people who come forward to settle the dues under the scheme, the accrued interest on tax arrears till the amount is paid will be totally waived.
The new Samadhan scheme will commence on October 16, 2023, and will be in force till February 14, 2024.
“Complete waiver for dues of less than ₹50,000 is a revolutionary relief to the small traders and the waiver of accrued interest on tax arrears till the amount is paid is an unexpected concession which no other government has announced,” said S Rethinavelu, President, Agrofood Chamber of Commerce & Industry and Member, Tamil Nadu Traders Welfare Board.