Highlights of MVAT and other disputed taxes settlement Ordinance

CA Umesh Sharma  on 11 March 2019


Arjun (Fictional Character): Krishna, the Maharashtra Government has introduced various schemes in the Budget to settle old disputes. Considering the same, the government has introduced an ordinance to solve disputes between Maharashtra government and taxpayers. What is this ordinance?

Krishna (Fictional Character):  Arjun, Maharashtra govt. has introduced a separate ordinance for settlements of all tax regulations, old disputes, arguments, lawsuits etc. on 6th of March 2019 .This ordinance is named as 'Maharashtra Settlement of Arrears of Tax, Interest, Penalty, or Late fees Ordinance Act, 2019'. It means the Govt. is in full endeavor to complete pending Appeals, assessments or disputes. Due to which disputes that are carried forward from years will be settled as well as Govt. will collect tax, also expenditure on disputes will be cut down. But how the taxpayers respond to this ordinance, this has to be seen.

Arjun (Fictional Character): Krishna, Which dealers will be a part of this Ordinance?

Krishna (Fictional Character):  Arjun, Registered as well as Unregistered dealers will be a part of this ordinance.

Arjun (Fictional Character):  Krishna, Settlement under which acts can be done as per this Ordinance?

Krishna (Fictional Character):  Arjun, this Ordinance is applicable to the whole of Maharashtra. The ordinance is also applicable to all the acts covered under The Govt. Department. Total 11 acts are covered under this:

  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 Employments Act, 1975;
  6. The Maharashtra Sales Tax on the Transfer of Right to use any Goods for any Purpose Act, 1958;
  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; and
  11. The Maharashtra Value Added Tax Act, 2002.

Arjun (Fictional Character): Krishna, what is meant by disputed amount?

Krishna (Fictional Character): Arjun, Disputed amount means Tax, Interest, penalty, late fees payable as per any Statutory order under the relevant act; or notice, assessment order, litigation, etc. Even if any amount is payable as per other disputes, this Ordinance shall be applicable. This Ordinance shall not be applicable to Undisputed amount. Amount which is Payable according to the return is Undisputed amount, and this ordinance will not be applicable to it.

Appeal filed for disputed amount needs to be withdrawn before application of settlement by the applicant.

For Example; If in the MVAT return filed of June 2015, MVAT tax payable amount is Rs. 1.5 lakhs, which is undisputed, this ordinance will not be applicable.

Arjun (Fictional Character):  Krishna, What is the duration to pay required amount under this ordinance?

Krishna (Fictional Character): Arjun, following table is regarding the payment of required amount;


Dispute period

Nature of Liability

Phase I : 1 April 19 - 31 July 19

Phase II: 1 July 19 - 31 July 19

Payment

Waiver

Payment

Waiver

Upto 31 March 2010

Tax

50%

50%

60%

40%

Interest

10%

90%

20%

80%

Penalty

5%

95%

10%

90%

1 April 2010 to 30 June 2017

Tax

70%

30%

80%

20%

Interest

20%

80%

30%

70%

Penalty

10%

90%

20%

80%


*Percentage of disputed amount

Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna (Fictional Character): Arjun, in life, everything does not happen as we want it to happen. Everyone has to compromise somewhere or the other. Same goes with Tax regulations. This ordinance is introduced so that taxpayers will not have to visit department for ages. We expect Central government to introduce same ordinances for Excise as well as service tax and other central tax laws.   


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