Finance Minister K N Balagopal announced on Friday that the new amnesty scheme is designed to support small-scale traders.
The traders have reported being unfairly assessed by tax personnel and facing technical issues. Consequently, a significant portion of the taxes department’s resources was spent on defaulter cases. Government records show substantial arrears primarily due to penal interest on small amounts. These issues led the government to introduce the amnesty scheme, Balagopal stated on Friday.
He acknowledged that previous amnesty schemes were not effective, but expressed confidence that the new scheme will benefit the small-scale retail sector.
“Previously, amnesty schemes were seen as revenue generators. The new scheme aims to address persistent problems in the tax sector, covering pre – GST tax arrears but excluding arrears from turnover tax and compounding scheme related to liquor trade,” he explained.
Under the new scheme, cases against 22,267 businesses with arrears up to Rs 50,000 will be dismissed, accounting for Rs 116 crore, or about 44% of the total due amount.
For arrears between Rs 50,000 and Rs 10 lakh, involving 51,516 cases, defaulters must pay 30% of the dues.
For arrears between Rs 10 lakh and Rs 1 crore, defaulters who have filed appeals need to pay 40%, while others must pay 50%, acknowledging the appeal payments already made.
For arrears exceeding Rs 1 crore, those who have appealed must pay 70%, while others must pay 80%. Traders who join the scheme promptly will receive full benefits, while latecomers will receive reduced benefits, Balagopal noted.
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