Offering one-time settlements for minor GST offenses

Oct 19, 2022 | GST FAQ, News | 0 comments

The government is considering a Goods and Services Tax (GST) dispute settlement scheme offering a one-time opportunity for businesses to settle tax cases and avoid litigation, officials aware of the development said.

It will be a time-bound scheme covering only minor GST offences while offering a one-time opportunity to settle past disputes under excise duty, service tax and customs duty, they said.

The scheme will need to be approved by the GST Council, the apex decision-making body for the indirect tax.

“Discussions are on to allow businesses to settle cases, and once we are ready with the details, it may be taken to the Council,” a government official told ET.

The scheme will not cover wilful tax evasion, he said. Repeat offenders and offenders against whom enforcement agencies have initiated will also not be eligible.

The idea is to de-clutter courts and dispose of cases arising because of differences in the interpretation of GST provisions, the official said.

The proposed scheme is likely to be on the lines of the Centre’s ‘Sabka Vishwas Scheme’ of 2019, which sought to resolve all legacy disputes relating to erstwhile service tax and central excise.

The GST Council is already working on dedicated tribunals for dispute resolution.

Officials said setting up tribunals may take some time and in the interim, a one-time dispute settlement mechanism may speedily help clean up small disputes.

“There are instances where the department has spent more money on pursuing the litigation than the tax claims,” a second official said, making a case for this one-time settlement scheme.

The industry has also approached the government seeking such a scheme, people in the know said.

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