Govt to unveil amnesty scheme to claim VAT arrears

THIRUVANANTHAPURAM: The state GST department is busy completing procedures to roll out the amnesty scheme for Value Added Tax (VAT) arrears announced in the 2020-21 budget. The pending arrears of VAT, the pre-GST tax regime, is worth around Rs 5,000 crore. The department’s internal audit wing is now conducting an evaluation of potential cases since 2013-14 which will be forwarded to the assessment authorities.

The government plan is to send notices at the earliest so that traders can file amnesty petitions before June 30. Traders need to pay only 40 per cent of tax arrears if the amount is paid before September 30. Subsequent payments, until December 31, will be eligible for a 50 per cent waiver. There is 100 per cent waiver on interest and penalties in both cases. Department sources said efforts are also being made to dispose of appeal petitions to enable those businesses to avail of the amnesty.  

However, they fear a cold response to the amnesty scheme in the wake of the economic slump due to Covid-19. “Most businesses have suffered huge losses owing to the lockdown. The perishable goods trade is the worst hit. They will find it hard to purchase new stocks and resume business. Hence, there won’t be many takers for the amnesty scheme,” an officer said.