The Maharashtra Settlement of Arrears of Tax, Interest ... · The Maharashtra Settlement of Arrears...

Appasaheb Gorde,

Deputy Commissioner,

(Act & Rule).

The Maharashtra Settlement of Arrears of Tax,

Interest, Penalty or Late Fee Ordinance, 2019

9-May-19e- Governance_Vision 1

Why Amnesty Scheme.?

Workload of authorities

After GST introduction, work

load on the officers has

increased substantially.

However, intention is to

focus on GST

Blockage of funds

Substantial amount is

blocked due to prolonged

litigations.

Approx. __ stuck in

litigations

Revenue to Government

Instant one time revenue for

the government and a clean

slate.

Focus to be shifted on

matters under GST

Numerous pending cases

Even after introduction of

GST, assesse’ s left with

earlier disputes

Win-win Situation

Safeguarding of the revenue

for undisputed tax and

Incentive to taxpayer on

disputed tax

Hardship on genuine

taxpayers ?

Supreme court held that

Intention of such amnesty

scheme is to secure

governments revenue

The Maharashtra Settlement of

Arrears of Tax, Interest, Penalty

or Late Fee Ordinance, 2019

(Mah. Ord. No. V of 2019) dated

the 6th March 2019.

Order issued to notify the Forms

to be used under the Ordinance

Trade Circular 9T of 2019 dated

8th March 2019.

Internal Circular 10A of 2019

dated 3rd April 2019 with

Annexures and Statements.

Notification to notify transactions that

may constitute any issue under

section 19(2) of the Ordinance

User Manual for

•Preparation and uploading of application for

Settlement

•Creation of User profile by the dealer who has

never obtained registration and dealers whose

registration certificate is cancelled.

•E-payment of Requisite amount under

Settlement.

Basic material on Settlement

Ordinance


Maharashtra Value Added

Act, 2002* Central Sales Tax Act,

1956 * Profession Tax

Act, 1975

Mah. Entry Tax on Motor

Vehicles Act, 1987*

Mah. Entry Tax on Other

Notified Goods Act, 2002

*

Mah. Tax on Luxuries Act,

1987 *

Mah. Purchase Tax on

Sugarcane Act, 1962 *

Bombay Sales of Motor

Spirit Taxation Act,

1958*

Bombay Sales Tax Act,

1959*

Mah. Transfer of Right to

Use any Goods Act,

1985*

Mah. Works Contract

Act, 1989*

*Repealed*Partly subsumed

(Except 6 Goods)

ACT(S) UNDER WHICH THE ARREARS

CAN BE SETTLED

(Referred under the Ordinance as Relevant Act)



ACHIVEMENT UNDER AMENSTY AND SETTLEMENT ACT

COMPARATIVE STATEMENT

Sr. No.

ParticularsAmnesty Scheme-

1995

Amnesty Scheme-

1999

Amnesty Scheme-

2004

Settlement Act-2016

Proposed Settlement

1

Arrears at the beginning of the Scheme/Act (Fig. In Cr.)

1946 2339 4,853 86,450 83,701

2No. of cases involved (Fig. in No.)

64,957 82,236 1,78,299 4,87,211 3,73,820

3No. of Applications received.(Fig. in No.)

52168 50874 61,225 41,559

4Arrears Settled (Fig. In Cr.)

266.54 281.46 358.46 4,000

5 Tax paid (Fig. In Cr.) 115.41

82.2 246

1534.89

6Penalty interest paid (Fig. In Cr.)

30.19 418.45

7Total Amount paid (Fig. In Cr.)

145.6 82.2 275.56 1953.34

8Percentage to the total Arrears

7.48 3.51 5.68 2.26

8Expected Collection (Fig. In Cr.)

200 150 350 491.28


PENDING RECOVERY AS ON NOVEMBER-2018PARTICULARS B.S.T. V.A.T. GST TOTAL

1 Available for Recovery 1063.29 7926.38 21.75 9011.42

2 Not Available for Recovery 8620.08 89968.28 88.06 98676.42

Total Recovery 9683.37 97894.67 109.80 107687.84

Bifurcation of Not Available Recovery

A Stay in Appeals

1: Department Authority 2754.30 43921.50 0.01 46675.81

2: Tribunal 1410.95 19430.21 0.00 20841.16

3: H.C.,S.C. 715.04 4689.68 0.00 5404.72

4: Section 33(4) ( C ) 44.55 69.18 0.00 113.73

5: Government 0.28 68.30 0.00 68.58

6:CST 0.00 0.00 0.00 0.00

TOTAL - A 4925.12 68178.87 0.01 73104.00

B Government Agencies

1: Official liquidator 629.99 3533.32 0.00 4163.31

2: R.R.C. 422.98 1661.23 0.00 2084.21

3: B.I.F.R. 639.82 1708.78 4.53 2353.13

Who is Eligible to make application

the tax payer whose registration

is continued after 1st July 2017;

under the Relevant Act was valid at any

time on or before the 30th June 2017.

is cancelled at any time on or before

the 6th March 2019.

Tax payer who has never

obtained registration under

any of the Relevant Act (Un-

registered tax payer).


Sr.

No.Particulars First Phase Second Phase

(1) Time limit for payment

of the requisite amount.

From the 1st April 2019

to 30th June 2019.

From the 1st July 2019

to 31st July 2019.

(2) Duration for submission

of application.

From the 1st April 2019

to 30th June 2019.

From the 1st July 2019

to 31st July 2019.



Sr. No Particular s Annexure-A & B

(1) Phase(s) FIRST PHASE

(2) Duration of the Phase 1st April 2019 to 30th June 2019

(3) Period of the Scheme Upto 31st March

2010

1st April 2010 to

30th June 2017

(4) Payment and waiver Amount to be paid

Amount to be

waived

Amount to be paid

Amount to be

waived

(5) Un-disputed tax amount 100% 0% 100% 0%

(6) Disputed tax amount50% 50% 70% 30%

(7) Amount of interest payable as per any

statutory order or returns or revised returns 10% 90% 20% 80%(8) Outstanding penalty amount as per any

statutory order 5% 95% 10% 90%(9) Amount of Post Assessment Interest or

Penalty or both leviable but not levied upto

the date of application by the dealer under

the Relevant Act

0% 100% 0% 100%

(10) Late fee payable in respect of returns filed

during the period commencing from 1st

April 2019 to 31st July 20190% 100% 0% 100%


Sr.

NoParticulars Annexure-A & B

(1) Phase(s) SECOND PHASE(2) Duration of the Phase 1st July 2019 to 31st July 2019(3) Period of the Scheme

Upto 31st March 20101st April 2010 to 30th

June 2017

(4) Payment and waiver Amount

to be paid

Amount to

be waived

Amount to

be paid

Amount to

be waived

(5) Un-disputed tax amount 100% 0% 100% 0%

(6) Disputed tax amount 60% 40% 80% 20%(7) Amount of interest payable as per any

statutory order or returns or revised returns20% 80% 30% 70%

(8) Outstanding penalty amount as per any

statutory order10% 90% 20% 80%

(9) Amount of Post Assessment Interest or Penalty

or both leviable but not levied upto the date

of application by the dealer under the Relevant

Act

0% 100%0% 100%

(10) Late fee payable in respect of returns filed

during the period commencing from 1st April

2019 to 31st July 20190% 100% 0% 100%

Arrears of tax, interest, penalty or late fee eligible for

Settlement:

payable by the assessee as per any statutory order under

the Relevant Act

admitted in the return/revised return and which has remained un-paid

wholly or partly (Short filing amount).

determined and recommend to be payable by the auditor, in the

audit report either wholly or partly

in respect of which notice has been issued in relation to any proceeding

determined to be payable by assessee where no notice in

relation to any proceeding is issued.


Assessment order;

Rectification Order;

Revision Order/ Review Order

Order Passed in First appeal

Order Passed in Second appeal

Reference

Writ Petition, Special Leave Petition9-May-19e- Governance_Vision 16

Statutory Orders under Relevant Act

eligible for Settlement

Sr. No. Form No. Purpose of Form

(1) Form-I Application for settlement of arrears of tax, interest, penalty or late

fee payable as per the Statutory order.

(2) Form-IA Application for settlement of arrears other than the Statutory orders

like return/revised return dues, dues as per recommendations in

audit report or self-assessed dues etc.

(3) From-II Application for withdrawal of appeal.

(4) Form-III Notice of Defect in respect of application for settlement of arrears.

(5) Form-IV Order of Settlement or Order of rejection.

(6) Form-IVA Order of Settlement or Order of rejection.

(8) Form-V Notice for Rectification of Mistakes to be issued by the Nodal

Officer.

(9) Form-VI Application for Rectification of Mistakes to be submitted by the

applicant.

(10) Form-VII Notice for review.

Forms that are used for Settlement

notified under section 19(2)


•The said statutory order shall be for any period which ends on or

before the 30th June 2017.

•The statutory order passed any time after 15th July 2019 is not

eligible for Settlement.

Arrears of tax, interest, penalty or late fee as per Statutory order:

•The tax, interest, late fee admitted in the return/revised but which

has remained un-paid.

•The late fee waiver is available for the returns that pertains to the

period ending on the 30th June 2017 and those are filed during the

period 1st April 2019 to 31st July 2019 (Please refer Annexure-A

and B)

Arrears of tax, interest or late fee as per Return or the revised return:

Key Terms used in the Ordinance


“arrears of tax, interest, penalty or late fee” [see

section 2(1)(c)]:

•Recommendations made by the Auditor in respect of tax, interest or late

fee:

•are accepted by the dealer then such amount is treated as the un-

disputed tax and no waiver is available under the Ordinance.

•are NOT accepted or are PARTLY accepted then to the extent of such

non-acceptance, such amount of tax, interest or late fee would be

disputed and the extent of the waiver shall be as per section 10 read with

section 4 and Annexure-A and B



“arrears of tax, interest, penalty or late fee”

[see section 2(1)(c)]:

• Where notice for assessment is issued but assessment is pending:

•The amount of the risk towards the tax is intimated

either through notice in F-604 or otherwise.

•The tax, interest or penalty communicated to the

dealer and as is acceptable to him may be settled after

payment of the requisite amount payable under the

Ordinance.



“arrears of tax, interest, penalty or late fee” [see

section 2(1)(c)]:

•Where NO notice for assessment is issued but

assessment is pending:

•The amount of the tax and interest as self assessed

by the dealer may be settled after payment of the

requisite amount payable under the Ordinance.

•The assessee subject to the conditions given in the

Ordinance may settle the said amount.



“requisite amount” [see section 2(1)(l)]:

•An amount determined in terms of section 10

depending upon the Phases under the Ordinance

and period for which settlement is desired. This

amount is aggregate of,-

•Un-disputed amount of tax paid in full and

•Such percentage of the disputed tax, interest,

penalty or late fee as given in Annexure-A or

Annexure-B.



“return dues [see section 2(1)(m)]:

• The amount of tax, interest or late fee admitted in the returns or

the revised returns under the Relevant Act that are filed on or

before the 15th July 2019 and such returns pertains to the period

ending on or before the 30th June 2017 and such amount is

remained unpaid partly or fully.

• Subject to the conditions given in section 7 and 8 of the Ordinance

the payment outstanding as on 1st April 2019 (in case returns are

filed upto 31st March 2019) the assessee may settle such dues with

the payment of the requisite amount.

• .



•The said statutory order shall be for any period

which ends on or before the 30th June 2017.

•The statutory order passed any time after 15th July

2019 is not eligible for Settlement.

Specified period [section 2(1)(n):

•Any order that is passed under the Relevant Act

raising demand of tax, interest, penalty or late fee.

Statutory order [Section 2(1)(o):





Un-disputed tax means [Section 2(1)(q)”

• No waiver is available in respect of the un-disputed tax. The

following taxes are treated as un-disputed tax:

• The taxes that are collected separately

• The deductions allowed by the authorities in the statutory order for the taxes

collected separately.

• The taxes shown payable in the return or the revised return under the Relevant

Act

• An amount claimed by the dealer as deductions or allowed by the designated

authority as per rule 57 of the MVAT Rules or under similar rules under other

Relevant Act

• An amount forfeited under the statutory order or excess tax collection shown in

the return, revised return or, Audit report submitted under the Relevant Act.



Un-disputed tax means [Section 2(1)(q):

• Any amount of tax, interest or late fee determinedand recommended to be payable by the auditor, inthe audit report and accepted by the assesseeeither wholly or partly; or

• the tax deducted at source (TDS) by the employerunder the Relevant Act; or

• the tax collection made under section 31A of theValue Added Tax Act.

• Disputed tax: Disputed tax means the tax otherthan the un-disputed tax.

Examples


Period 2015-16 Order of Assessment passed on 20th April 2018

(1) Computation of settlement benefits [see section 5(a) and 5(b)]

Particulars Tax Interest Penalty Total

(3) Demand details 5,00,000 2,50,000 75,000 8,25,000

(4) Bifurcation of tax as disputed and und-disputed Ratio

(5) Un-disputed 3,00,000 60:40

(6) Disputed 2,00,000

(7) Amount paid 2,00,000

(8) Balance Outstanding as on 1.4.2019 Requisite amount

(8) Particulars Amount Outstanding

(a) Un-disputed 1,80,000 100% 1,80,000

(b)disputed 1,20,000 70% 84,000

Requisite amount for tax 2,64,000

Interest 2,50,000 20% 50,000

Penalty 75,000 10% 7,500

Total Requisite amount Rs.3,21,500/-

Examples of un-disputed tax [Period 2015-16]


Sr. No.

ParticularsAs claimed by the Dealer in return

As worked by the Assessing authority

(1) GTO of Sales 1,00,000 1,60,000

(2) Tax rate 5% 12.5%

(3) Tax Collection 5,000 5,000

(4) Taxes payable 5,000 20,625

(5) Set-off 1,000 500

(6) Balance taxes payable 4,000 20,125

(7) Taxes paid WR 0 0

(8) Interest u/s 30(3) 0 5000

(9) Penalty 0 10,000

(10) Total amount payable 4000 35125

(11) Amount paid as on 1.5.2018 16500

(12) Appropriation made as per section 40 of MVAT Act

Penalty 10000

(a) Interest 5000

(b) Balance Outstanding Tax 18,625



Sr. No.



(1) GTO of Sales 1,00,000 1,60,000

(2) Tax rate 5% 12.5%



(5) Set-off 1,000 500


(8) Interest u/s 30(3) 0 5000

(9) Penalty 0 10,000


(11) Amount paid as on 1.5.2018 0

(a) Computation of Requisite Amount Requisite Amount

(b) Un-disputed tax amount (100%) 4000 4000

(c) Disputed tax amount (70%) 16125 11288

(d) Interest (20%) 5000 1000

(e) Penalty (10%) 10000 1000 17,288



Sr. No.



(1) GTO of Sales 1,00,000 1,60,000

(2) Tax rate 5% 12.5%



(5) Set-off 1,000 500


(8) Interest u/s 30(3) 0 5000

(9) Penalty 0 10,000


(11) Amount paid as on 1.5.2018 0


(b) Un-disputed tax amount (100%) 20,125 20,125


(d) Interest (20%) 5000 1000

(e) Penalty (10%) 10000 1000 22,125


Sr. No.



Deductions claimed by the dealer or the deductions allowed by the authority u/r 57 (Period 2014-15)

(1) GTO of Sales 5,10,000 5,10,000

(2) Tax rate 5% 12.5%

(3) Deduction claimed under 57(1) 24,286 56,667

(4) Taxes payable 24,286 56,667

(5) Set-off 9,000 7,500


(8) Taxes paid with Return 15,286 15,286

(9) Balance Taxes Payable 0 33,881

(10) Interest u/s 30(3) 0 8,900

(11) Penalty 0 16,500

(12) Total amount payable 0 59,281



(c) Disputed tax amount (70%) 1,500 1,050

(d) Interest (20%) 8,900 1,780

(e) Penalty (10%) 16,500 1,650 36,867


Sr. No.



Excess tax collection forfeited

(1) GTO of Sales 10,50,000 10,50,000

(2) Tax rate 5% 5%


(4) Taxes payable 52,500 52,500

(5) Set-off 19,000 19,000

(6) Taxes paid with Return 33,500 33,500

(8) Balance taxes payable 0 0

(9) Excess Tax Collection forfeited 0 16,000

(10) Interest u/s 30(2) 0 8,900

(11) Penalty 0 6,500

(12) Total amount payable 0 31,400




(d) Interest (20%) 8,900 1,780

(e) Penalty (10%) 6,500 650 18,430

Examples of un-disputed tax


Return period------April-2018 to June-2018

Sr. No.



(2) Amount admitted in the return Tax Interest Late fee Total

(3) 1,00,000 25,000 5,000 1,30,000

(4) Less: Amount paid till 31.12.18 25,000 10,000 1,000 36,000

(6) Outstanding amount as on01.01.2019

75,000 15,000 4,000 94,000

(8) Determination of Outstanding as on 1.4.2019

64,000 25,000 5,000 94,000

(9) Re-appropriation of amount paid till 31st March 2019

(10) Tax (Un-disputed) 64,000

(11) Interest (20%) 5,000

(12) Late fee (100%) 5,000

Total of Requisite amount 74,000 Waiver 20,000

Example of disputed tax


Assessment Period-2014-15 (First Phase)


(2) Demand raised in the CST AO Tax Interest Penalty Total

(3) 10,00,000 4,00,000 5,00,000 19,00,000

(4) demand of tax due to disallowance Highseas Export Tax Diff. Forms

(6) Outstanding amount as on 01.01.19 2,00,000 1,50,000 3,00,000 3,50,000

(7) Part of Rs. 4.15 Lakh payment made 20,000 15,000 30,000 3,50,000

(8) Outstanding dues as on 01.04 1,80,000 1,35,000 2,70,000 0

(9) Issue based withdrawal Appeal to be withd In App. Bal. Arrears

(10) For Highseas 1,80,000 0 1,80,000

(11) Disallowance of Export 1,35,000 1,35,000

(12) Difference in Tax Rate 2,70,000 0 2,70,000

(13) C Forms 3,50,000 0 0

Total of Requisite Tax amount (70%) 9,35,000 0 5,85,000

Tax(70%) 4,09,500

Interest (20%) 80,000

penalty (10%) 50,000 5,39,500

Any payment made in respect of any statutory order either inappeal or otherwise on or before the 31st March 2019 shall bereduced from the demand so raised.

The appropriation of amount paid on or before the 31st March2019 shall be made in the following order:◦ Tax ,

◦ Interest,

◦ Penalty

◦ Late fee

After adjustment as above, the amount remaining outstanding shallonly be considered as “arrears” eligible for Settlement.

After reducing the amount as above, apply the ratio of the un-disputed tax and disputed tax to the balance amount of arrears oftax

This appropriation shall also be available for the dues as per returnor the revised return.

Adjustment of payments made before

the 31st March 2019. (Section 5)


For seeking benefits there is NO need to file appeal.

However, in case the appeal is filed and the applicant desires to opt for

Settlement then the appeal shall be withdrawn un-conditionally.

The applicant shall make a separate application for each statutory

order/return dues, Form-704 dues etc. under each of the Relevant Act.

However, in case the settlement is being desired against the return dues

for the multiple period in a Financial year then single application can be

made.

Application for the settlement of Arrears

◦ on or after 1st April 2019 but on or before 30th June 2019 if applicant desires to

take benefit in First Phase and

◦ on or after 1st July 2019 but on or before 31st July 2019 if the applicant desires

to take benefit in the Second Phase.

Eligibility and conditions for settlement

(Section 6 and 7 )


Every application shall be accompanied by the proof of payment of

requisite amount & other documents mentioned in Application Form.

No arrears of tax, interest, penalty or late fee shall be settled if statutory

orders are made or returns are filed after 15-07-2019 EXCEPT WHERE

THE RETURNS FOR PERIOD UPTO 30TH June 2017 is filed during the

period 1st April 2019 to the 31st July 2019.

The applicant is eligible to opt for the Settlement even though the

benefits under the earlier “Amnesty Scheme” is taken including that of

Settlement Act, 2016.

No Application shall be allowed in case the revised return filed on or

after the 6th March 2019 till 15th July 2019 which results into reduction in

the tax, interest or both except when such reduction is due to the

payment in cash.


(Section 6 and 7 )


Settlement in respect of Remand back cases:

◦ Settlement in respect of cases remanded back by the Tribunal may

be settled.

◦ In case the order giving effect to the directions given by the

applicant [under section 23(8)] is not passed then the settlement

may be done on the basis of the computation done by the

applicant.

◦ To reduce disputes it will be better all such orders are passed at

earliest i.e. well before the 15th July 2019.

◦ The cases remanded for fresh hearing by the First appellate

authority may also be settled on the basis of the computation done

by the applicant.

.


(Section 6 and 7 )


Corrective actions in the cases where Audit objection has been

raised.

◦ The cases where the Audit objections are raised either by STRA or

Internal Audit and that are pending in the Appeal then all such

cases should be disposed of at earliest and should not be allowed

to be withdrawn unless corrective action is under taken.

◦ In other cases that are pending for corrective actions such as

review, revision etc, should be disposed at early. This will help the

applicant to avail the benefits under the Ordinance.


(Section 6 and 7 )


Conditional Settlement in the cases where tax payer has taken

credit under GST:

◦ This provision aims to prevent undue advantage to the tax payer who has taken

the credit under GST,

◦ The tax payer desires to settle the arrears, if any, in respect of credit of VAT or

entry tax for period ending June-2017 taken to the GST only on reversal of said

credit set-off that are pending for corrective actions such as review, revision etc,

should be disposed at early. This will help the applicant to avail the benefits

under the Ordinance.


(Section 6 and 7 )


In case the appeal is filed the appeal and the appellant desires to settle the

arrears either wholly or partly then un-conditional withdrawal of appeal is

mandatory.

The appellant is allowed to withdraw appeal either wholly or partly.

The application to be made in Form-II to the respective appellate authority

including the Tribunal or the Court.

The appellate authorities to acknowledge the said application and pass the

withdrawal order to the extent the appellant desires to withdraw appeal i.e.

either wholly or partly.

.

Withdrawal of appeal

(Section 8 )


Passing of appeal withdrawal order is must.

Once the appeal withdrawal order is passed the copies of such orders is

to be given to the appellant as well as concerned Nodal Officer The

Acknowledgement is to be treated as sufficient proof towards the

withdrawal of appeal.

The applicant to clearly mention the issues in respect of which he/she

desires to withdraw the appeal.

The applicant to mention the amount of tax, interest or penalty in respect

of which appeal is withdrawn and the tax, interest or penalty for which

appeal is continued.

.

Withdrawal of appeal

(Section 8 )


The notification is issued by the Commissioner on 7th March 2019. The

following transaction to constitute an issue:◦ certificates are defective, partly received or partly not received and additional tax

liability is estimated therefore or Statutory order is passed disallowing the claim in that

behalf;

◦ Mis-match of set-off where gross purchases claimed by the buyer in Annexure-J2 of

Audit Report or in return and gross sales declared by the supplier in Annexure-J1 of

Audit Report or in returns does not match.

Where the set-off as provided under the Relevant Act is disallowed due to

◦ purchases made from non-genuine dealer;

◦ purchases made from the dealer whose registration certificate cancelled at the time of such

purchases;

◦ purchases made from supplier who has not filed returns;

◦ purchases made from supplier of goods who has paid lump-sum payment in lieu of tax i.e.

composition dealer under Value Added Tax Act;

Transactions that may constitute an issue:

(Section 9 )


The notification is issued by the Commissioner on 7th March 2019. The

following transaction to constitute an issue:◦ Where in the opinion of the dealer, assessing authority or the appellate authority has

committed an error in computation of the set-off or retention of set-off or denial of set-

off as per any rule made in this behalf under the Value Added Tax Rules for the

contingencies provided therein or any of the provision of the Relevant Act;

◦ Where assessing authority or the appellate authority has disallowed any deduction

claimed by the applicant or has applied the wrong rate of tax in respect of any

transaction of sales or certain income receipts are treated as taxable sales in their

order.

the tax payer is not allowed to take the benefits against interest,penalty or late fee, alone treating them an issue unless theoutstanding associated tax together with interest, penalty or the

late fee is also considered as an issue.

Transactions that may constitute an issue:

(Section 9 )


Un-disputed tax has to be paid in full. No waiver is available towards un-

disputed tax.

The extent of the requisite amount and the waiver in respect of disputed

tax, interest, penalty or late fee is to be calculated considering the period,

Phase of Settlement.

It is important to note that to get the benefits under the First Phase the

applicant need to make the payment as well submission of application in

First Phase only. In case the payment is made during the First Phase but

the application is submitted during Second Phase, then such applicant

shall be entitled to get benefit available for the Second Phase.

Determination of requisite amount and extent of the waiver:

(Section 10 and Annexure-A & B)


Similarly, if applicant submits the application during the First Phase and makes

short payment during First Phase and the balance payment during Second

Phase, the applicant will be entitled to get benefit available for Second Phase in

respect of the amount paid during Second Phase.

Where payment made by the applicant is less than the requisite amount in

accordance with the provisions of the Ordinance, the proportionate amount of

waiver will be admissible in proportion to the requisite amount paid by the

applicant.

In the case of short payment of requisite amount, requisite amount paid shall

first be adjusted towards the un-disputed tax in full as NO waiver in respect of

un-disputed tax is allowed and remaining amount shall thereafter be adjusted

proportionately towards the disputed tax, interest, penalty or late fee.

:




Determination of requisite amount under Entry Tax Act:

◦ The requisite amount on account of entry tax is linked to the set-off

reduced or denied under rule 53 or rule 54 of the MVAT Rules.

◦ Therefore, the requisite amount shall be equal to the amount of set-off

reduced or denied under rule 53 or 54 respectively, of the MVAT Rules and

the amount of interest or penalty as determined considering the Phase and

period for which settlement is sought.

◦ The amount of entry tax paid if any, on or before 31st March 2019 on any

account is not be considered as requisite amount.

◦ The requisite amount for the purpose of entry tax is to be determined in

terms of section 10(2) of the Settlement Ordinance.





.




Sr. No. Factors considered Particulars

(1) The period of Assessment. 2005-06

(2) Value of the goods imported. Rs. 8,00,000

(3) Rate of tax under Entry Tax Act. 12.5%

(4) Tax liability as per AO. Rs. 1,00,000

(5) Date of payment of requisite amount. 3rd May, 2019

(6) Date of submission of application under Ordinance. 5th May 2019

(7) Phase under the Ordinance. First Phase

(8) Set-off admissible under MVAT Rules as per rule 52. Rs. 1,00,000

(9)

*Goods imported are used as a fuel, hence the reduction in set-off u/r 53(1) or

53(1A) 4% of the purchase price of the corresponding goods i.e. of Rs.

8,00,000/-.

Rs. 32,000


.




Sr. No. ParticularsLiability as per

A.O.

Requisite Amount to be paidAmount to be

waived

% Amount

(1) Entry Tax @ 12.5% 1,00,000 4* 32,000 68,000

(2) Interest determined 35,000 10 3,500 31,500

(3) Penalty imposed 50,000 5 2,500 47,500

(4) Total 1,85,000 38,000 1,47,000

Determination of proportionate benefits in case the requisite amount

is short paid: [Rs. 1,31,000-1,25,000=6,000]

[Rs. 1,25,000-50,000=75,000]. [Rs.75,000+6,000=81,000]

75,000 X 100/81,000=92.59%

.




Sr. No. ParticularsArrears as on 1st

April 2019

Requisite amount to be paid

(Annex.-B)

First Phase Amount

paid*Amount

short paid

% Amount

(a) (b) (c) (d) (e) (f)(g)

(1) Amount of un-disputed tax 50000 100 50000 50,000 0

(2) Payment towards disputed tax 100000 70 70,000 64,815 5,185

(3) Interest determined 30000 20 6000 5,556 444

(4) Penalty payable 50000 10 5000 4,630 370

(5) Total 2,30,000 1,31,000 1,25,000 6,000

Determination of proportionate benefits in case the requisite amount

is short paid: (Period: 2014-15)

.




Sr. No. Particulars

Basis for

calculation of

requisite

amount

Requisite amount to be paid

(Annex.-B)

First PhaseAmt. to be

waived

Amt. to be

considered in 2nd

Phase

% Amount

(a) (b) (c) (d) (e) (f) (g)

(1)Amount of un-

disputed tax50,000 0 50,000 0 0

(2)Payment towards

disputed tax92,593 70 64,815 27,778 7,407

(3) Interest determined 27,778 20 5,556 22,222 2,222

(4) Penalty payable (10%) 46,296 10 4,629 41,667 3,704

(5) Total 2,16,667 1,25,000 91,667 13,333

The amount of Rs.13,333/- remained outstanding at the end of the First

phase may be settled under Second Phase as given below:◦ Tax--------------------7,407------------5,926

◦ Interest--------------2,222----------- 667

◦ Penalty--------------3,704----------- 741

The proportionate benefits shall be available as per Second Phase in

case the requisite amount short paid is paid in Second Phase.

No benefit shall be available in respect of amount that is paid after the

31st July 2019.

The application shall not be rejected merely on the ground that the

requisite amount is short paid.




Application for the settlement of Arrears in Form I or Form IA and shall be submitelectronically at https://www.mahagst.gov.in.

A separate application for each class of arrears and for each period under the each of

the Relevant Act need to be submitted.

The documents to be attached with Form-I or Form-IA

◦ Proof of payment of the requisite amount as determined;

◦ Copy of statutory order or return or revised return or audit report recommendations or the notice

in relation to the initiation of any proceedings against which settlement is sought for;

◦ Original order of withdrawal of Appeal or in case the said order is not received then

acknowledgement of request letter submitted for withdrawal of Appeal.(Form-I )

◦ Copy of self calculation of tax, interest or late fee liability where no notice is issued and in

respect of which settlement is sought for;

◦ Copies of Chalans of payment of amount paid after the date of order or against the outstanding

dues in other cases till 31st March 2019.

Verification of application and passing order of

settlement


https://www.mahagst.gov.in/

The designated authority shall verify the correctness and completeness of the application

as also the particulars submitted with application.

Issuance of Defect Notice:

In case it is noticed that the application in Form-I or Form-II is incorrect or incomplete or

requisite amount paid is deficient, then the designated authority shall issue defect notice

Online Form III within 15 days from the date of receipt of application and intimate the

defects.

Only one defect notice is to be issued.

The applicant to comply with the defect so communicated within 15 days of the receipt of

defect notice.

The applicant shall correct the defects and make payment, if short paid. The compliance

is proposed to be online.

The payment made after 31st July 2019 is not be considered towards the requisite

amount..

Issuance of Defect notice and its compliance


If the designated authority is satisfied regarding correctness and

completeness of application, he will compute requisite amount and extent

of waiver considering Phase in which requisite amount is paid.

If the designated authority is satisfied that the applicant has paid the

requisite amount, he will pass an order in Form IV and provide copy of

the same to applicant.

Where the applicant fails to correct defects communicated, the

designated authority may after giving opportunity of being heard and

recording reasons in writing pass appropriate order giving proportionate

benefit as may be available

However, no application shall be rejected merely on the ground of less

payment of requisite amount.

Passing of Order of Settlement (Section-12)


In case the Settlement application in Form-I or Form-IA is not in

accordance with the provisions of Ordinance, the designated authority

after giving an opportunity of being heard to applicant, issue order

rejecting application Form IV A.

Ex. In case the applicant has not made payment of requisite amount at

all.

No application shall be rejected merely on the ground of less payment of

requisite amount or documents are partly uploaded or no documents are

uploaded.

Rejection of Settlement application (Section-12)


Rectification of Order:

The designated authority may, on his own motion or on

application of the applicant.

Nodal officer to issue notice for rectification in Form-V

The applicant to submit application for rectification in Form VI.

Rectification of any error apparent from the record to be

rectified within six months from the date of receipt of the order

of the Settlement by the applicant.

No order adversely affecting the applicant shall be passed

without giving a reasonable opportunity of being heard.

Rectification of order of Settlement


Appeal (Section-13):

In case the applicant is not satisfied with the order of Settlement then the

applicant may prefer an appeal.

The appellate authorities are as under:

◦ Deputy Commissioner of Sales Tax in case the Order is passed by the

A.C. or the STO.

◦ Joint Commissioner of Sales tax in case the order is passed by the

Deputy Commissioner.

The appeal is to be filed with the jurisdictional D.C. or the J.C. and not to

the appellate authority i.e. D. C. (App.) or J. C. (App.)

Any order passed under this Ordinance is appealable.

Appeal against the order of Settlement


Powers of the Authorities (Section 14)

Appellate authority do not have any jurisdiction to the extent of the application for

settlement is filed and appeal is allowed to be withdrawn.

The assessing authority, appellate authority including Tribunal, revisional authority or

reviewing authority shall proceed to decide such assessment, appeal, revision or review

in accordance with the Relevant Act –

◦ to the extent of the issues for which no application is made; or

◦ in case an order rejecting the application is passed and against which no appeal is

filed.

Powers of the Authorities


Effects of Settlement Order

The order of Settlement shall be discharge the liability of the applicant to

the extent of the amount of waiver specified in the Order of Settlement.

An order issued shall be conclusive as to the settlement of arrears

covered under that order and the matter covered by such order shall not

be re-opened in any proceeding or review or revision or any other

proceedings under the Relevant Act.

Subject to the provisions of section 16 and 17 order passed shall be final.

Bar of re-opening of the settled cases.


Review of Order

The Commissioner can call for the record of order passed by the

designated authority, on his own motion, within 12 months from the date

of service of the order.

If the Commissioner notice an error in such order prejudicial to the

interest of revenue, may serve on the applicant a notice Form VII and

pass an order to the best of his judgment, where necessary.

.

Review of order of Settlement


Revocation of order of Settlement:

If an order is revoked, assessment, revision, review or appeal under

Relevant Act covered by such order shall, notwithstanding anything

contained, stand revived or reinstated immediately upon revocation.

However, an appeal shall be re-instated on application made in this behalf to

the appellate authority within 60 days from the date of communication of the

order of revocation.

In the case of revocation of order, notwithstanding the period of limitation

provided under the Relevant Act, such assessment, revision, review or

appeal shall be made within two years from the date of passing revocation

order.

The amount paid by the applicant under the Ordinance shall be treated to

have been paid under the Relevant Act.

Revocation of order of Settlement


◦ As per the provisions of the Settlement Ordinance NO refund is

available to the applicant on any grounds of the amount paid under the

Ordinance.

.

No refund under the amount paid under the

Ordinance


Thank you!


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