Bihar Government notifies Bihar Settlement of Taxation Disputes Act and Rules for Pre-GST Settlements [Read Notification]

The Government of Bihar has notified the Bihar Settlement of Taxation Disputes Act, 2024 and rules to implement and enforce the same.

The Government had introduced a significant ‘one-time settlement’ initiative on Thursday, targeting traders burdened with tax liabilities from the pre-GST era. Deputy Chief Minister and Finance Minister Samrat Chaudhary presented the Bihar Tax Disputes Settlement Bill, 2024 in the state assembly, successfully passing it through a voice vote.

Read More: Bihar Govt announces One Time Settlement for Pre-GST Tax Dues

Here are the main points outlined in the Bihar Settlement of Taxation Disputes (BSTD) Rules:

1. Rule Introduction: The BSTD Rules, established under the Bihar Settlement of Taxation Disputes Act, 2024 (Bihar Act 04, 2024), serve as guidelines for resolving taxation disputes within Bihar. These rules were introduced by the Governor of Bihar.

2. Application Procedure: Parties seeking to resolve tax disputes are required to submit a completed and signed FORM-I application to the designated authority at least twenty days before the rules expire. Each dispute requires a separate application along with supporting documents like tax filings, payment proofs, and relevant orders or notices related to taxes, penalties, fines, or interests.

3. Procedure and Documentation: Applicants must furnish comprehensive information such as trade name, business address, PAN, email, mobile number, dispute details, and supporting documents. The application should be directed to the relevant authority based on the dispute nature, as specified in the rules.

4. Application Review: The reviewing authority will scrutinize applications within two days. If discrepancies or incompleteness are detected, a deficiency memo (FORM-III) will be issued for rectification. Failure to address these issues within four days may lead to application rejection. Upon meeting all requirements, including payment verification and accurate disputed amount computation, the authority will instruct the party to deposit the settlement amount.

5. Settlement Process: Upon settlement amount deposition, the authority will issue a dispute settlement order (FORM-VI) and communicate all relevant directives, memos, and instructions via email as outlined in FORM-I. Non-compliance, such as failing to deposit the settlement amount within specified deadlines, will result in application rejection; however, parties have the option to reapply following proper procedure.

Chaudhary had highlighted the potential relief for traders with pre-GST tax liabilities once the bill is notified. Under the proposed scheme, traders can settle their pre-GST tax obligations by paying only 10% of the penalty, with the remaining 90% being waived. Additionally, a 35% payment of the disputed tax amount will result in a waiver of the remaining 65%.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates