Latest news with #pre-GST
Time of India
20-07-2025
- Business
- Time of India
Govt, corporates settle tax row over factories in hilly regions
A tussle between the government and several corporates running factories in hilly regions has come to an end. Many companies, including some of the large ones, would now be spared of the allegation of claiming extra benefits from factories in the North East and other states. Under the law, these units receive budgetary support and can claim refunds of the goods and services tax (GST). This is a continuation of the government's area-based exemption programme intended to promote industries in some of the remote regions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Tallakulam: 1 Trick to Reduce Belly Fat? Home Fitness Hack Shop Now Undo Over the past two months, some of the pharmaceutical and other manufacturing companies received notices from the GST authorities stating that they had over-claimed the benefits. The companies were asked to pay back the extra benefits they had received. However, on Friday, a direction from the Central Board of Indirect Tax and Customs (CBIC), the apex indirect tax authority, to principal chief commissioners and chief commissioners of Chandigarh, Silkim, Kolkata, Guwahati and Meerut, stating that units would be "eligible to claim refunds based on actual value addition subject to verification' brought an end to the dispute, sources told ET. Live Events According to Ashish Karundia, founder of the CA firm Ashish Karundia & Company, 'The notices were issued on two main grounds: (a) excessive claims of budgetary support, and (b) claims made for ineligible activities. The clarification issued by CBIC is both timely and beneficial, particularly for those in the industry who have claimed refunds beyond the prescribed rates of value addition. Although the clarification responds to concerns raised by pharmaceutical units, it should be applicable across the industry, whoever has claimed the refunds.' The bone of contention related to the extent of value addition eligible for tax benefit. Under the earlier pre-GST structure, the excise benefit in the form of tax refund was the lower of the cash component of the excise paid and a certain percentage of the value addition. The extent of value addition was prescribed by the tax department and differed from industry to industry. Under a special rate scheme, refund claims above the prescribed value addition was also allowed subject to verification. The difference between the industrial units and the tax department arose from the ambiguity in the language of the revised notification that was issued post GST. The department argued that the caps on value addition prevailed and companies have claimed refunds beyond the caps. But the companies disagreed, with some moving the court, on the grounds that there were no rigid caps in the new scheme under which 58% of the cash component of GST could be claimed as refund. 'Also, the (new) scheme applies only to specified goods that are both manufactured and cleared by eligible units. Unlike the previous excise regime, wherein the benefit of exemption was available even to deemed manufacturing units, barring a few exceptions, the GST budgetary support scheme limits the benefits to manufacturing activities only. If the units are engaged in activities that do not qualify as 'manufacture' within their natural meaning, such units may be denied the refunds, relying on the wording of the scheme notification. However, given that the budgetary scheme is only a substitute for the erstwhile scheme wherein deemed manufacturing activities were eligible, the denial of refunds may not be justified,' said Karundia. THE ARITHMETIC Excise payment was typically split between cash and cenvat credit that was derived from payment of taxes for procurement of inputs. Say, the extent of value addition pegged by the government is 56%. For an item worth Rs 100 and excise duty of Rs 12.50 (@ 12.5%), the refund claimed was Rs 7 (i.e, 56% of Rs 12.50). Even if the unit had paid Rs 10 as cash and the balance Rs2.50 as credit for the excise duty amount, the refund in this case would not exceed Rs 7. Under the revised scheme brought in with GST, companies interpreted that 58% or 29% of the quantum of cash amount could be claimed as refund. But according to the tax department, the refund could not exceed 58/29% of the cap (which it insisted continued in the new scheme). This significantly lowered the refund amount as the capped amount was 56% of the GST amount. HIGHLIGHTS: Tax benefits are aimed to promote industry in hilly areas This was in the form of partial excise relief The notification was tweaked post GST Dispute arose in the interpretation of the new scheme
Hindustan Times
15-07-2025
- Business
- Hindustan Times
Delhi cabinet may approve amnesty scheme for ₹85,000 crore unpaid VAT taxes
The Delhi Cabinet is likely to soon approve a long-awaited tax amnesty scheme aimed at resolving nearly ₹85,000 crore in outstanding dues – primarily under the pre-GST Value Added Tax (VAT) regime – from before 2017, officials aware of the matter said on Monday. The scheme, currently under high-level discussion, will offer significant waivers on penalties and interest, encouraging over 300,000 traders across sectors operating in the Delhi to settle long-pending tax liabilities. (Vipin Kumar/HT Photo) The scheme, currently under high-level discussion, will offer significant waivers on penalties and interest, encouraging over 300,000 traders across sectors operating in the Delhi to settle long-pending tax liabilities. A senior official in the Delhi government's finance department said the Trade and Taxes Department has submitted a detailed proposal outlining a framework for full or partial waivers on penalties, interest, or both. 'More than 300,000 traders together owe about ₹85,000 crore. Through the amnesty scheme, the government aims to recover at least 50% of this amount. It will both boost tax revenue and ease the legal burden on the administration,' the official said. Tax amnesty schemes are periodically rolled out by state governments to allow taxpayers to pay principal dues while availing relief on additional charges such as interest and penalties. Such schemes are notified under laws like the Delhi VAT Act and must receive Cabinet approval. A second official confirmed that the amnesty framework — which defines eligibility, waiver slabs, deadlines, and conditions — is in its 'final stages', and will soon be presented to the Cabinet. However, officials were unable to provide a clear timeline on when the proposal would be tabled before the Cabinet. The scheme is expected to offer waivers of up to 50% on total dues, with traders required to pay the remainder to settle their liabilities. Most of the pending dues date back to before the implementation of Goods and Service Tax, or GST, in July 2017 and are tied up in prolonged litigation, draining departmental resources. 'The amnesty scheme will provide a fast-track resolution mechanism, and will help free up the department's time and energy to focus on current tax collections,' the official cited above said. The proposal gained momentum after Delhi chief minister Rekha Gupta, while addressing traders at a Confederation of All India Traders (CAIT) event in May 2025, announced plans for a one-time tax amnesty as part of her government's broader effort to revitalise the city's business climate. GST advocate Sushil Verma noted that such a scheme, implemented under the Delhi VAT Act, would bring welcome relief to thousands of traders. 'Thousands of old VAT cases are languishing in courts. Once the amnesty scheme is launched, traders can withdraw these cases and benefit from the relief offered. Similar schemes in other states have successfully increased revenue and reduced legal backlogs,' he said. The amnesty initiative is part of Delhi's broader fiscal strategy to meet its ambitious ₹1 lakh crore budget target for FY 2025–26. Of this, ₹68,700 crore is expected from tax revenues—a 16% jump from the previous year. The rest will be raised through non-tax revenues, central grants, and loans.
Time of India
09-07-2025
- Business
- Time of India
Delhi govt plans one-time tax amnesty scheme to settle pre-GST disputes
Delhi govt may soon roll out a one-time tax amnesty scheme to settle pre-GST disputes related to value-added tax (VAT), excise, and service tax, as per a Times of India report. Sources told TOI that a proposal recommending the waiver of penalties and interest to expedite the recovery of the actual tax amount and reduce court cases is being prepared by the trade and taxes department, which is likely to be sent to the cabinet for its approval. If approved, the scheme is expected to offer relief to traders and boost state revenue while easing the administrative burden of long-pending litigation. According to officials, there are more than 3.5 lakh traders currently involved in tax-related litigation with the Delhi govt, and the total disputed tax amount is estimated to be over Rs 15,000 crore. Sources said the actual unrecovered value would be around Rs 5,500-6,000 crore, with the rest of the amount due from traders in the form of interest and penalties. They added that these legacy cases date back to before the rollout of GST in July 2017. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. "Several of these cases are currently stuck in courts, contributing to administrative delays and backlog. The proposed amnesty aims to reduce this legal burden by offering traders a clean slate," said a Delhi govt official. Sources told TOI that the trade and taxes department has shared the initial proposal with the finance department. The scheme will also have to be vetted by the planning and law departments before it is placed before the cabinet for its approval. The former AAP government had also proposed a tax amnesty scheme aimed at offering relief to traders and unlocking revenue tied up in legal disputes. Then Finance Minister Manish Sisodia announced the plan during the 2022–23 budget speech, but the scheme was never implemented. Live Events A senior Delhi govt official said the city's traders took up the matter every time their delegation met the chief minister to discuss issues related to tax, revenue, and the redevelopment of markets. Sources said the recovery of tax revenue stuck for years will not only strengthen the financial position of Delhi govt, but will also save a large amount of money spent by the dispensation on a large number of tax-recovery cases against the traders in courts. The GST and VAT are the biggest source of tax revenue earned by the Delhi govt. Of Rs one lakh crore budget presented by BJP-govt for the 2025-26 financial year, Delhi govt has estimated that Rs 68,700 crore will come from tax revenue, which includes Rs 49,000 crore from GST and VAT. (With TOI inputs)
Time of India
08-07-2025
- Business
- Time of India
Delhi govt may roll out one-time tax amnesty scheme to settle pre-GST disputes
New Delhi: Delhi govt may soon roll out a one-time tax amnesty scheme to settle pre-GST disputes related to value-added tax (VAT), excise, and service tax. Sources said a proposal recommending the waiver of penalties and interest to expedite the recovery of the actual tax amount and reduce court cases is being prepared by the trade and taxes department, which is likely to be sent to the cabinet for its approval. If approved, the scheme is expected to offer relief to traders and boost state revenue while easing the administrative burden of long-pending litigation. According to officials, there are more than 3.5 lakh traders currently involved in tax-related litigation with the Delhi govt, and the total disputed tax amount is estimated to be over Rs 15,000 crore. Sources said the actual unrecovered value would be around Rs 5,500-6,000 crore, with the rest of the amount due from traders in the form of interest and penalties. They added that these legacy cases date back to before the rollout of GST in July 2017. "Several of these cases are currently stuck in courts, contributing to administrative delays and backlog. The proposed amnesty aims to reduce this legal burden by offering traders a clean slate," said a Delhi govt official. Sources said the trade and taxes department has shared the initial proposal with the finance department. The scheme will also have to be vetted by the planning and law departments before it is placed before the cabinet for its approval. You Can Also Check: Delhi AQI | Weather in Delhi | Bank Holidays in Delhi | Public Holidays in Delhi The previous AAP govt also proposed to bring the tax amnesty scheme to provide relief to traders and recover the much-needed revenue that was stuck in litigation. The announcement was made by the then finance minister Manish Sisodia in the budget speech for the 2022-23 financial year, but the scheme never saw the light of day. A senior Delhi govt official said the city's traders took up the matter every time their delegation met the chief minister to discuss issues related to tax, revenue, and the redevelopment of markets. Sources said the recovery of tax revenue stuck for years will not only strengthen the financial position of Delhi govt, but will also save a large amount of money spent by the dispensation on a large number of tax-recovery cases against the traders in courts. The GST and VAT are the biggest source of tax revenue earned by the Delhi govt. Of Rs one lakh crore budget presented by BJP-govt for the 2025-26 financial year, Delhi govt has estimated that Rs 68,700 crore will come from tax revenue, which includes Rs 49,000 crore from GST and VAT.
&w=3840&q=100)
Business Standard
06-07-2025
- Business
- Business Standard
Eight years on, GST regime is okay, but GST officers are not efficient
In pre-GST regime, importers of goods were paying additional duties of Customs & taking Cenvat Credit of the same. Now, they are paying Integrated GST and taking input tax credit (ITC) of the same TNC Rajagopalan Listen to This Article Last Monday, the Goods and Services Tax (GST) regime completed eight years. Here is a brief on how importers and exporters have managed during this period. In the pre-GST regime, importers of goods were paying additional duties of Customs and taking Cenvat Credit of the same. Now, they are paying Integrated GST (IGST) and taking input tax credit (ITC) of the same. So, there is not much difference but the nuisance of the special additional duty in lieu of value added tax is gone. Any cess, ITC of which cannot be taken, is always an irritant and there are a
