In a strategic move to recover long-pending tax dues, the Maharashtra state government has proposed a key amendment to its Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2025. The revised provisions aim to unlock an estimated Rs 20,000 to Rs 25,000 crore in outstanding taxes owed by public sector units (PSUs), banks, infrastructure companies and various government authorities dating back to the pre-GST era.
The amendment bill, introduced in the state legislative assembly on Thursday by the Finance Department, seeks to make the amnesty scheme more inclusive by covering entities not registered under the Companies Act, 2013 but still operating as central or state government undertakings. These include municipal bodies, public sector banks, and infrastructure authorities such as MHADA, MSRDC, MMRDA, and central PSUs like IOC, BPCL, HPCL and Mazagon Dock Ltd.
"Earlier in March, when the Act was passed, public sector units registered under the Companies Act were included. However, we inadvertently left out entities constituted through government resolutions or those registered under other Central or State Acts," said a senior SGST official.
Tax experts believe the expanded scope of the amnesty scheme could facilitate the recovery of at least Rs 10,000 crore immediately, easing fiscal pressures and reducing legacy litigation.
A notable success story from the earlier scheme includes Hindustan Aeronautics Ltd, which cleared dues amounting to Rs 2,471 crore soon after the original Act was passed in March 2025.
The bill accompanying the amendment highlights the substantial amount of disputed tax levies currently locked in litigation involving corporations, public sector banks, and government bodies. By offering a lump sum payment option to settle arrears of tax, interest, penalties, and late fees, the government hopes to close thousands of legacy cases and improve cash flow.
The proposed amendment will be discussed in the assembly before formal approval. If passed, it is expected to significantly enhance the effectiveness of the amnesty initiative and provide a one-time resolution mechanism for entities burdened with pre-GST tax disputes.
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