Maharashtra expects to recover up to ₹3,000 crore from unrealised tax revenue under amnesty scheme

Mumbai: The Maharashtra government expects to recover outstanding tax revenue of ₹2,500 crore- ₹3,000 crore from the amnesty scheme for disputed cases, announced in the state budget earlier this month. A bill related to the scheme was passed in both houses of the state legislature on Thursday.

The pending amount to be recovered from disputed tax cases over several years is ₹94,527 crore, while the outstanding amount from non-disputed cases is ₹48,534 crore. While the undisputed tax revenue has to be fully recovered, that won’t be the case with disputed cases, with the amnesty scheme offering to pay 30%-50% of the outstanding amount.

According to officials, non-disputed tax recovery is pending due to various reasons. “The non-disputed tax cases are the ones that have been already recovered by the companies but not paid to the government. The payment to the government has not been done due to several reasons, such as the company shutting down or moving. The amnesty scheme is not applicable to non-disputed tax cases,” said an official from the state finance department.

Most of the unrealised tax revenue stems from tax disputes with public sector undertakings (PSUs) of the central and state governments, including oil companies and defence manufacturers. This includes ₹66,411 crore from oil companies as sales tax/VAT and ₹21,519 crore from central sales tax.

These disputes are due to differences over taxation, as some companies do not agree with the tax levied on various grounds. Most such cases have been pending since before the introduction of the Goods and Services Tax (GST) in 2017.

The state government has identified disputed cases with a total outstanding amount of ₹25,000 crore that could be resolved through the amnesty scheme. “By waiving the penalty and interest, the scheme offers to pay 50% of the outstanding amount from the cases between April 2005 and June 2017. The remaining amount will be written off. For the cases before March 2005, the PSUs will have to pay 30% of the actual tax under the amnesty scheme. This would help us in mopping around ₹3,000 crore of the outstanding,” said an official from the GST commissionerate.

Speaking in the state assembly, state finance minister Ajit Pawar said, “The amnesty scheme is aimed at the state and central government PSUs and will continue until December 31, 2025.” After the bill was passed in both houses, the amnesty scheme is expected to be operationalised soon once a notification is issued.

The bill states, “Large amounts of tax recovery have been blocked in litigations under various tax laws, resulting in the sizable portion of the recovery being litigated by the public sector undertaking companies. In order to unlock the outstanding amount and reduce the old pending litigations, the government has amended the laws.”