E-Paper
UP Govt hopes for revenue mop-up with OTS for traders
The scheme will be in effect for three months and cover tax liabilities prior to the GST regime that came into effect on July 1, 2017
The authorities are keeping their fingers crossed for the success of the one-time settlement scheme (OTS) announced for the state’s traders/dealers.
The scheme gives the traders an opportunity to clear their arrears with no or reduced interest, depending on the amount of the dues.
Successful implementation of the scheme may help the government to bolster its coffers with the help of recovery of pending tax liabilities in the time of pandemic that is said to have squeezed government’s resources.
“We have made elaborate arrangements by setting up a helpdesk under a gazetted officer at each location to help dealers avail of the government’s scheme,” commercial tax commissioner Amrita Soni said.
“We expect a good response to the OTS,” she added.
She further said officials were asked to verify the documents and personally contact the defaulters, encouraging them to avail of OTS.
The government recently brought the OTS. In line with this scheme, the interest on the traders’ tax liabilities under UP Sales Tax Act, Central Sales Tax Act, UP Entertainment Tax Act, UP Cable Television Network Act up to December 2020 will be waived, provided one opting for the scheme clears the principal amount at one go.
The scheme will be in effect for three months. But it does not cover the GST arrears. “OTS will cover tax liabilities prior to the GST regime that came into effect on July 1, 2017,” another official dealing the issue clarified.
“There are around ₹3,000 crore recoverable tax arrears pending against thousands of traders and dealers, including government agencies,” the official said.
The OTS circular issued by the government seeks to waive 100% interest component on the arrears up to ₹10 lakh, 90% on the arrears of over ₹10 lakh and up to ₹1 crore, 50% on the dues between ₹1 crore and 5 crore and only 10% on the arrears if they are above ₹5 crore. The exemption be will available only for full payment of the arrears.
The available data shows that successive one-time settlement schemes (OTS) have not been able to make any significant dent in the amount of arrears, the volume of which keeps on fluctuating.
It is seen that the total recoverable (undisputed) dues in 2013-14 were ₹1957.95 crore. It went up to ₹2594.53 crore the next year and further increased to ₹4270.21 crore in 2015-16. The arrears were ₹4161.43 crore in 2016-17 and rose again to ₹4430.17 crore in 2017-18 before they again came down to ₹3444.15 crore in 2018-19.
Although the department is still not sure as to how many defaulters would like to avail of the OTS this year, over 18,000 traders/dealers having old tax liabilities against them are said to have opted for the interest waiver scheme in 2019-20.
