Punjab Govt Extends One-Time Settlement Scheme for Clearing Pre-GST Arrears’ Deadline to March 31, 2026

The Punjab Government has extended the deadline for its One-Time Settlement ( OTS ) Scheme for recovery of outstanding tax dues till 31 March 2026. This would be a great relief to taxpayers with pending pre-GST ( Goods and Services Tax ) liabilities.

The scheme intends to enable businesses to settle legacy disputes relating to VAT, Central Sales Tax, and other pre-GST laws. This will avoid unnecessary litigation.

The Finance Minister of Punjab, Harpal Singh Cheema said that the extension of the deadline was an outcome of representations received from multiple stakeholders, reported the Times of India.

"The extension is a relief for the trading community and industry. Taxpayers faced a heavy statutory compliance burden during the final months of 2025, which saw overlapping deadlines for various tax filings” said the official.

The scheme was introduced in the month of October 2025. This intends to reduce long litigation while unlocking blocked revenue.

It provides taxpayers an easy and affordable way out of lengthy disputes which allows them to get up to 100% waiver of interest and penalties along with the principal tax amount, depending on the amount of demand.

The minister has recommended that rice millers and other eligible firms make use of this last chance to pay off their arrears and start next financial year free from tax liabilities.

In 2024, Punjab's OTS scheme resolved value-added tax ( VAT ) arrears and collected ₹62.29 crore from 44,503 traders who submitted their applications. Similarly, 2025’s OTS scheme will give better results for the government.

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