Context:

• State government of Haryana has introduced the Haryana One-Time Settlement Scheme for recovery of outstanding tax dues with an aim to streamline GST regime.

Key Points:

• The One-Time Settlement Scheme (OTS) is aimed at addressing the longstanding issue of outstanding tax dues, particularly those incurred prior to the implementation of the Goods and Services Tax (GST).

• This initiative is a crucial step in alleviating the financial burden on small taxpayers and facilitating a smoother transition into the GST framework, which has been a significant reform in India's tax structure.

Objectives of the OTS scheme

The OTS scheme is designed with several key objectives in mind:

Reducing tax arrears:

• The primary goal is to clear the backlog of outstanding tax dues that have accumulated over the years, especially those predating the GST implementation. This will help in cleaning up the tax books and providing a fresh start for taxpayers.

Expediting recovery:

• The scheme aims to streamline the recovery process for outstanding dues, making it more efficient for both the government and taxpayers. By simplifying the process, the government hopes to enhance its revenue collection efforts.

Providing relief:

• A significant focus of the OTS is to offer financial relief to small taxpayers who may find it challenging to meet their tax liabilities. This is particularly important in the context of the economic challenges posed by the COVID-19 pandemic.

Encouraging compliance:

•  By reducing penalties and interest on outstanding amounts, the scheme seeks to foster a culture of compliance among taxpayers. This is essential for building trust between the government and the business community.

Key features of the OTS Scheme

The OTS scheme categorizes outstanding tax liabilities into four distinct groups, each with specific payment terms:

Undisputed fees:

• Taxpayers are required to pay 100% of the amount due without any penalties or interest, encouraging prompt settlement of dues.

Disputed Taxes:

• For disputed amounts below ?50 lakh, taxpayers must pay 30% of the outstanding dues.
• For amounts exceeding ?50 lakh, the payment requirement increases to 50%, incentivizing resolution of larger disputes.

Undisputed taxes assessed by the department:

• If no appeal has been made, taxpayers will pay 40% for amounts below ?50 lakh and 60% for amounts exceeding this threshold. This category also offers relief from penalties and interest, making it easier for taxpayers to settle their dues.

Outstanding Amounts Due to Tax Rate Differences:

• Taxpayers are required to pay only 30% of the total amount due in this category, further easing the financial burden.

Eligibility criteria

The OTS scheme is applicable to outstanding dues related to seven pre-GST tax acts, including:

• Haryana Value Added Tax Act, 2003
• Central Sales Tax Act, 1956
• Haryana Local Area Development Tax Act, 2000
• Haryana Tax on Entry of Goods in Local Area Act, 2008
• Haryana Luxury Tax Act, 2007
• Punjab Entertainment Fee Act
• Haryana General Sales Tax Act, 1973

However, certain applicants are excluded from eligibility, including those involved in criminal proceedings related to these acts and cases involving erroneous refunds. This exclusion is crucial to maintain the integrity of the scheme and ensure that it benefits genuine taxpayers.