State offers tax defaulters one-time settlement option

Ranchi: In order to increase revenue and reduce tax-related litigations, the state finance department has announced “one-time settlement” scheme for tax defaulters, mainly those involved in the commercial sector.
State finance minister Rameshwar Oraon on Wednesday said the move is part of government’s way to provide cushion to tax defaulters and motivate them to sort out tax-related discrepancies. “The tax-related litigations are both time-consuming and costly for everyone. While the government loses out on the revenues, the aggrieved party also at times ends up spending more on litigation fees than the actual tax he/she owed to the government. Therefore, the government has decided to provide a one-time settlement scheme to clear all the backlogs and bottlenecks through mutual discussion with the defaulters,” he said.
The state government brought in this scheme through a bill (Jharkhand Karadhan Adhiniyam ki Bakaya Rashi Ka Samadhan Adhiniyam, 2022) which was passed by the state assembly during the winter session. The governor gave his consent after returning it initially owing to technical glitches.
With its formal rollout now, the finance department is hopeful of reducing the tax pendency and litigations to a large extent.
According to the finance department’s data, taxes to the tune of around Rs 3,500 crore are pending and about 5,000 tax litigations are subjudice in different courts.
Oraon said they are expecting to rake in at least Rs 500 crore through this scheme to begin with. “This will help us add to state’s exchequer to plan our spending for the next fiscal,” he said.
On this year’s revenues vis-à-vis the target, he said that despite GST compensation pending at the Union government level, the state government has generated better revenues. “Till February 20, 2023, against the target of Rs 18,000 crore revenue through different taxes, we have earned Rs 500 more. We are expecting to cross Rs 21,000 crore by the end of this fiscal year. Since July, we haven’t received any funds under GST coffers from the Centre but did better due to thoughtful spending and fiscal discipline,” the minister said.