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Maharashtra Settlement of Arrears in Disputes Act, 2016 is a form of Amnesty Scheme effective from April 2016 till 30 September 2016 came in force from 26th April 2016.

The following Tax Acts are covered:

  1. Maharashtra Value Added Tax Act, 2002
  2. Central Sales Tax Act, 1956
  3. Profession Tax Act, 1975
  4. Maharashtra Entry Tax on Motor Vehicles Act, 1987
  5. Maharashtra Entry Tax on Other Notified Goods Act, 2002
  6. Maharashtra Tax on Luxuries Act, 1987
  7. Maharashtra Purchase Tax on Sugarcane Act, 1962
  8. Bombay Sales of Motor Spirit Taxation Act, 1958 (Repealed)
  9. Bombay Sales Tax Act, 1959 (Repealed)
  10. Maharashtra Transfer of Right to Use any Goods Act, 1985 (Repealed)
  11. Maharashtra Works Contract Act, 1989 (Repealed)

The settlement scheme under the Maharashtra Settlement of Arrears in Disputes Act, 2016 is as follows:

I) Determination of ‘Requisite Amount’ to pay & ‘Waiver Amount’ for Arrears in Dispute for Assessment Period upto 31 Mar 2005 (Sec. 6(1)) :

Nature of Arrears

Requisite Amount payable as per Scheme

Extent of Waiver as per Scheme

Tax

100% (after reducing Part Payment made in appeal)

NIL

Interest

NIL

100%

Penalty

NIL

100%

Post Assessment Interest/Penalty

NIL

100%

II) Determination of Requisite Amount to pay & Waiver Amount for Arrears in Dispute for Assessment Period from 1 Apr 2005 till 31 Mar 2012 (Sec. 6(2)) :

Nature of Arrears

Requisite Amount payable as per Scheme

Extent of Waiver as per Scheme

Tax

100% (after reducing Part Payment made in appeal)

NIL

Interest

25% (of outstanding Interest out of arrears in dispute)

75%

Penalty

NIL

100%

Post Assessment Interest/Penalty

NIL

100%

Designated Authority –

The Designated Authority for Implementation of Scheme as per Section 3  is Commissioner of Sales Tax & his Subordinate Officers.

The Commissioner has powers to prescribe forms, issue instructions & directions to DA to carry out purpose of this Act (Sec. 12) Conditions for Settlement (Sec. 4) :

  1. Submit correct & complete Application to Designated Authority i.e.concerned “Nodal Officer” (www.mahavat.gov.in) / Nodal JC for Mumbai & Pune / JC VAT ADM / ADM Head of other respective locations.
  2. For Profession Tax Act,1975 to the concerned PTO, upto 30 Sept 2016 in prescribed Form-I & manner (Para 2 & 3 of Cir # dt 3 May 2016)
  3. Submit Separate Application in Form-I for each Statutory Order under each Law covered alongwith Statutory Order copy, Stay Order Copy, Appeal Withdrawal Order, Challan of Requisite Amount paid & Challan of Undisputed arrears paid (Para 5(D) of Circular dt 3 May 16)

Withdrawal of Appeal (Sec. 5) :

Appeals pending before Appellate Authority or Tribunal or Court shall be withdrawn on or before 30 Sept 2016

- Where the applicant desires to opt for settlement of arrears in dispute for some of the issues (‘tax issues’ sec.6) raised in appeal then he shall withdraw the appeal in respect of such issues.

- For other issues the appeal may continue; i.e. Partial withdrawal of appeal(Turnover, Vat, Setoff, CST Forms, etc; Each Transaction is an issue, which shall be properly identified & informed to appellate authority while withdrawing appeal partially. However, interest /penalty itself will not be treated as an issue.

- Where the appeal is withdrawn for some of the issues, then the applicant shall pay whole amount of tax relating to such issues withdrawn in appeal and credit of part payment will be given in proportion to tax involved in the issues withdrawn in appeal [Sec.6(1) (ii) & Sec.6(2) (ii)](A) Part Payment made in appeal will be adjusted against Tax, then Interest & then Penalty [Sec. 6(4)]

Procedure for Disposal of Application (Sec.7 & 8)...

- Designated Authority (DA) may, issue a defect notice for the incomplete or incorrect application

- Applicant shall within 15 days from receipt of defect notice, correct the defects, make the payment, if any, and submit to DA

- If Applicant fails to respond to defect notice then DA, after hearing the Applicant, may reject application by passing ‘Rejection Order’ recording reasons for same (Sec. 7(1))

- Sec.8: Appeal shall be filed within 60 days of receipt of ‘Rejection Order’ passed u/s 7(1), before:

1. Deputy Commissioner if Order is passed by AC/STO

2. Additional Commissioner if Order is passed by JC/DC

- DA shall pass Settlement Order for each application, on being satisfied that all conditions of waiver are fulfilled. (Sec. 7(2))

- No appeal lies against ‘Settlement Order’ passed u/s 7(2) [Sec.8]

- Applicant shall be discharged from his liability of such arrears in dispute under the relevant Act for which the Order of Settlement has been passed.

- DA may, on his own motion or on application of the applicant, within 30 days from the date of receipt of Settlement Order by Applicant, rectify any error apparent on the face of the record

- DA shall give hearing opportunity to applicantbefore passing any adverse Rectification Order

Other Points in Settlement Scheme

- Revocation of Settlement Order issued: where it appears to DA that applicant has obtained the benefit of settlement, by suppressing any material information or particulars or by furnishing any incorrect or false information or, if any suppression of material facts, concealment of any particulars is found in the proceedings related to search and seizure under the relevant Act, then the DA may, for reasons to be recorded in writing and after giving the applicant a reasonable opportunity of being heard, may revoke the order of settlement issued. (Sec.10)

Review of Settlement Order issued: Commissioner may, on his own motion within 12 months from the date of service of order, call for the record of such order and after notice of error in such order, in so far as it is prejudicial to the interest of revenue, may serve on the dealer a notice and pass an order to the best of his judgement, where necessary. (Sec.11)

State Govt has powers to issue Rules under this Act & publish it. (Sec. 13)

Any Doubt, refer to respective JC / ADM Head of respective location of applicant (Para 15 of Circular dt 3 May 2016)

The settlement scheme under the Maharashtra Settlement of Arrears in Disputes Act, 2016 is as follows for Profession Tax

Reference & w.e.f. date

Gist of Amendment

Extent of Waiver as per Scheme

Amnesty Scheme for Self Employed Persons (PT EC Holder) from 1 Apr 2016 to 30 Sept 2016 (Sec. 3(3))

New Applicants for PT EC, applications pending as on 1 April 2016 and PT EC applications filed from 1Apr 2016 to 30 Sep 2016

Can be asked to pay tax for the periods only after 1 Apr 2013. Thus, max liability for FY 2013 – 2014 onwards, waiving liability for earlier periods.

1)  To pay full tax + interest @ 1.25%p.m.for delayed period. [Dept clarified to pay tax only in ‘whats new’ at www.mahavat.gov.in]

2)  To pay above sum between 1 Apr 2016 and 30 Sept 2016.

3)  If benefit of this not taken then, liability payable since 2008-09 and onwards.

4)  For FY 2016 -2017, due dt is 30 June 2016.

Clause (h) inserted in Sec 27A w.e.f. 1 April 2016

Armed members of CRPF & BSF, serving in Maharashtra State have been exempted from the levy & charge of Profession Tax.

To conclude, it is indeed advantageous for dealers to take advantage of this scheme to settle the outstanding disputes and appeals.


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