Punjab’s one-time settlement ( OTS ) initiative for resolving value-added tax ( VAT ) arrears has garnered significant traction since its launch.
Introduced as the OTS scheme 2023-24, the state government’s initiative, implemented five months ago, has facilitated the collection of ₹62.29 crore from 44,503 traders who submitted applications by March 31. Notably, 40,463 traders had arrears up to ₹1 lakh, while 4,040 traders fell within the ₹100,001-₹1 crore tax bracket, as per department sources.
Under this scheme, traders with arrears up to ₹1 lakh as of March 31, 2023, received a complete waiver of 100% tax, penalty, and interest. Meanwhile, those with arrears ranging from ₹1,00,001 to ₹1 crore were granted a 50% tax waiver and a full waiver of penalty and interest.
The OTS initiative, aimed at easing the compliance burden related to legacy cases, was initially active from November 15, 2023, to March 15, 2024. Eligibility was extended to taxpayers with assessments finalized by March 31, 2023, and total demand amounts (tax, penalty, and interest) not exceeding ₹1 crore. Following its success, the scheme was extended until June 30, 2024, by the state cabinet last month.
Harpal Singh Cheema, the taxation minister, hailed the scheme as the most successful one-time settlement initiative for pre-GST tax arrears in the state. Approved by the state cabinet on November 6, the OTS scheme 2023-24 aimed to resolve arrears for over 60,000 traders. Notably, traders presenting statutory forms could have their tax dues adjusted upon eligibility verification.
Official data highlights that previous one-time settlement schemes under the former government had collected ₹8.21 crore and ₹4.94 crore, respectively, showcasing the notable success of the current initiative.
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