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GST: One-time tax settlement boost for state exchequer - GST Station

GST: One-time tax settlement boost for state exchequer

GST: One-time tax settlement boost for state exchequer

    KOLKATA: The West Bengal government has a windfall just ahead of the general election which later can be spent for the social schemes of the chief minister. The state finance department has mobilised Rs 754 crore from one-time settlement scheme for entry tax, VAT, central sales tax and West Bengal sales tax on March 31, 2019, making it one of the most successful settlement schemes in the post-GST regime.

    Earlier, the state had mobilised a record Rs 1,100 crore from entry tax and other taxes through a settlement just ahead of the rollout of GST in June 2017. 

    The state had grossed a tax revenue of Rs 60,000 crore in the last fiscal and for the current fiscal, the target is kept at Rs 65,546 crore. According to sources, over 29,000 cases were resolved through the scheme, which, too, is a record. “The sheer number shows that a large number of MSMEs have decided to pay tax. It is a win-win situation for both the state and the tax payers. The tax payers can settle the dispute and avoid hassles by paying only a fraction of the amount, while the government gets a portion of the outstanding without getting into further litigation, which means additional cost as well,” sources said. 

    The West Bengal Sales Tax Act provides scope to the tax payers for settlement of dispute of outstanding tax liabilities. “With the introduction of GST, the tax prayers wanted a scope to resolve their long-pending disputes involving outstanding tax liability and streamline their accounts accordingly,” added sources. 

    The new scheme introduced in November 2018, provided for settlement of dispute on the basis of self-declaration by the taxpayers about outstanding liabilities upon payment entry tax with full waiver of penalty and interest and in case of VAT and sales tax only 35% of the disputed amount had to be paid for the settlement. “The scheme also provided for settlement upon payment of 50% of penalty for cases of evasion of tax,” added sources. 

    A special window for settlement of the pending entry tax was earlier kept open between June 6 and June 30, just ahead of the GST rollout. 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 the state and the tax was ‘compensatory’ in nature. In the first year of rollout, the collection from the tax was Rs 900 crore. The amount went up to Rs 1,200 crore the next year. 

    However, a petition challenging the constitutional validity of the Act was filed in end-2012 by several companies, including Tata Steel, Hindalco, Godrej Consumer, Whirlpool, Ranbaxy, Marico, Cadbury, Glaxo Smithkline Consumer and Bharti Airtel. Finally, the state moved the Supreme Court, which upheld the legal validity of entry tax in November 2016.

    Kumarjit Das, a city-based tax consultant, said his clients had deposited over Rs 30 crore through this scheme. Some of the big names in the list include Cadila, Zydus Wellness, Glaxo Pharma, Aventor, Whirlpool along with others. 

    Source- Times of India.

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