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CA Umesh Sharma

CA Umesh SharmaArjun (Fictional character): Krishna, this year Central Government has introduced various new provisions in the budget to settle tax related old disputes. Following that, the state government also has brought up law to settle the disputes between taxpayer and sales tax department, what is that law?

Krishna (Fictional character): Arjuna, this year the Central Government has introduced provisions in the income tax and service tax in the budget to settle old disputes. In the same way, the state government on 7th April 2016, in order to settle the disputes related to sales tax, has introduced a separate bill. The name of this law has been kept by the state government as “Maharashtra Settlement of Arrears in Dispute Act, 2016”. This implies that government has been trying to settle all old cases. By which the disputes running since many years would be reduced also the government would get revenue and the expenditure incurred by the government on it would get reduced. But let’s see how taxpayers would react towards this step of Central and state government.

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Arjun: Krishna, according to this law, for which cases taxpayer can go for disputes settlement?

Krishna: Arjuna, this law of settlement extends to the whole State of Maharashtra. This law is applicable to all the laws stated under Sales Tax Department. These are as under:

1) The Central Sales Tax Act, 1956

2) The Bombay Sales of Motor Spirit Taxation Act, 1958

3) The Bombay Sales Tax Act, 1959

4) The Maharashtra Purchase Tax on Sugarcane Act, 1962

5) The Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975

6) The Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985

7) The Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987

8) The Maharashtra Tax on Luxuries Act, 1987

9) The Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract (Re-enacted) Act, 1989

10) The Maharashtra Tax on Entry of Goods into Local Areas Act, 2002

11) the Maharashtra Value Added Tax Act, 2002,

Arjun: Krishna, if taxpayer applies for settlement under this then how he will be benefited?

Krishna: Arjuna, Government has divided this into 2 parts

1) Where the arrears in disputes pertain to any assessment period ending on before 31st March 2005, then the taxpayers paying tax will get waiver of interest and penalty.

2) Where the arrears in disputes pertain to any assessment period on and after 1st April 2005 and ending up to 31st March 2012, then the taxpayers will have to pay whole amount of tax and 25% of interest. That is, 75% of interest and penalty will be waived.

Arjun: Krishna, what taxpayers will have to do for applying to this scheme?

Krishna: Arjuna, those taxpayers who desires to apply under this scheme, will have to comply with the following:

1) Separate application shall be made by an applicant for each law.

2) Application should be filled before 30th September 2016 in the prescribed form.

3) The applicant shall produce the proof of withdrawal of appeal. Further the condition of stay in Appeal is there, which needs to be taken care off.

4) The applicant shall pay amount as stated above and proof of the same shall be submitted along with application.

Arjun: Krishna, what are the other important aspects of this law?

Krishna: Arjuna, the other important aspects of this law are as follows:

1) Sales Tax officer can reject the application by providing the reason for the rejection.

2) No refund shall be provided to the taxpayers in any circumstances.

3) After settlement, taxpayers cannot appeal for the same.

4) After the order is passed, the Commissioner within 12 months may call for the record.

5) Final rules and procedures for this settlement are yet to be notified.

Arjun: Krishna, What taxpayers should learn from this law?

Krishna: Arjuna, in life things does not happen, the way we want them to happen. Everyone has to compromise in some or the other way. Same is the case with the tax laws. Old disputes of the taxpayers pending with Department, for which they will not have to bear, “Tarik pe Tarik”, can be avoided by opting for settlement. Further GST is coming up, so Government through this law is trying to promote, “Clean Tax Law Campaign.”

Read about Reverse charge under GST here


Author Bio

1. Central Council Member of ICAI. 2. Vice-Chairman of WIRC of ICAI for the period 2015-2021. 3. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 4. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNEETI” published in Lokmat on every View Full Profile

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July 2024