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TN Govt Announces a New Samadhan Scheme for Traders to Settle Commercial Tax Dues of Rs. 25 Cr

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TN govt announces a new Samadhan scheme with waivers and concessions to settle ₹25,000 cr tax duesTamil Nadu (TN) government announced a new Tax Arrears Conciliation Scheme (Samadhan scheme) with waivers and concessions aimed at facilitating the settlement of the pending tax dues of about Rs.25,000 crore, of which a majority are under the erstwhile Tamil Nadu Value Added Tax (VAT) and other legacy tax legislations.

  • This initiative aims to address and resolve long-standing issues related to pending tax arrears, disputes, and appeals that have persisted between traders and the State Commercial Tax Department.
  • The scheme will be in force between October 16, 2023, and February 15, 2024.

Payment options:

i.The government has come out with different payment options for five categories of traders, depending on the size of their dues.

  • Below Rs 50,000
  • Between Rs 50,000 and Rs 10 lakh
  • Between Rs 10 lakh and Rs 1 crore
  • Between Rs 1 crore and Rs 10 crore
  • Above Rs 10 crore.

ii.As per the scheme, traders whose dues are below Rs 50,000, including taxes, interest, and penalty, are eligible for a complete waiver, and this is for every assessment year.

  • This is the first time in Tamil Nadu that the taxes to be paid by small traders are fully waived.
  • A total of 95,502 small traders will benefit from the scheme.

iii.Traders whose dues are between Rs.50,000 and Rs.10 lakh need to pay a flat 20% of their dues in a single installment.

  • Those who have accepted the tax assessment could pay 66% of their dues, 10% interest, and 10% penalty.
  • Traders who have gone on appeal or filed cases can get them settled by paying 33% of their dues, 10% interest, and 10% penalty.
  • If they have no tax dues but have penalty and interest dues, they can avail themselves of the scheme by paying 10% interest and 10% penalty.

iv.The above payment option is also applicable to the category of traders whose dues are in the Rs.10 lakh to Rs.1 crore range.

  • But they are not eligible for the flat rate of payment.

v.There is a different payment option for traders whose dues are between Rs.1 crore and Rs.10 crore.

  • Those who have accepted the tax assessment can pay 75% of their dues, a 15% penalty, and 20% interest.
  • Traders who have filed an appeal have been given the option of paying 50% of their dues, 20% interest, and 15% penalty.
  • If the traders had already paid the tax but not the penalty and interest, they could settle it by paying a 15% penalty and 20% interest.

vi.In the case of traders whose dues are more than Rs.10 crore, they have to pay 90% of their dues, a 15% penalty, and 30% interest if they have accepted the tax assessment.

  • Traders who have gone on appeal or filed cases could settle them by paying 60% of their dues, a 15% penalty, and 30% interest.
  • If they have no tax dues but have penalty and interest dues, they need to pay only 30% interest and a 15% penalty.

Key Points:

i.In the last 3 categories, traders could pay the mentioned portion of the tax, interest, and fine and move out.

ii.For people who come forward to settle the dues under the scheme, the accrued interest on tax arrears till the amount is paid will be totally waived.

iii.As Goods and Services Tax (GST) came into force on July 1, 2017, several pre-existing tax acts were all subsumed under GST. However, the tax arrears, interests, and penalties from the previous taxation system were pending.

Recent related News:

Central Board for Direct Tax (CBDT) under the Department of Revenue in the Ministry of Finance, issued a notification (No.61/2023) regarding the Income Tax Amendment (Sixteenth Amendment) Rules, 2023, a set of rules introduced as part of the Finance Act, 2023.

About Tamil Nadu:
Chief Minister– Muthuvel Karunanidhi Stalin
Governor– Ravindra Narayana Ravi
Airports– Coimbatore International Airport and Chennai International Airport