TN Government New Samadhan Scheme
In a significant move aimed at resolving long-standing tax disputes, the Tamil Nadu government, under the leadership of Chief Minister MK Stalin, has unveiled a revolutionary new Samadhan scheme. This scheme, announced in the State Assembly, comes with a host of waivers and concessions totalling ₹25,000 crores, predominantly addressing tax arrears from the erstwhile Tamil Nadu Value Added Tax and other legacy tax legislations.
The objective of the New Samadhan Scheme
The primary objective of the newly introduced Samadhan scheme is to bring an end to pending tax arrears, disputes, and appeals between traders and the State commercial tax department. This initiative became crucial in the aftermath of the implementation of the Goods and Services Tax (GST) on July 1, 2017, which subsumed several previous tax acts.
Categorization of Tax Dues
The Samadhan scheme has categorized tax dues into five broad segments based on outstanding amounts: ₹50,000 and below, above ₹50,000 to ₹10 lakhs, above ₹10 lakhs to ₹1 crore, above ₹1 crore to ₹10 crores, and above ₹10 crores.
Waivers and Concessions
For tax arrears below ₹50,000 for any assessment year, the Samadhan scheme offers a complete waiver of tax arrears, interest, and penalties. This move is anticipated to provide significant relief to over 95,000 small traders, marking the first-ever comprehensive waiver scheme for this category.
Traders falling in the ₹50,000 to ₹10 lakhs category can settle their disputes by paying just 20% of the dues or a portion of the tax, interest, and fines. Similarly, traders in the three higher categories can also resolve their disputes by paying the stipulated portions of tax, interest, and fines; notably, for those opting to settle their dues under the scheme, accrued interest on tax arrears until the payment will be entirely waived.
Recovery of Attached Properties
A distinctive feature of this Samadhan scheme is the return of properties that were previously attached as part of disputes. This marks a departure from earlier schemes that offered flat-rate concessions, as the current scheme tailors concessions to specific outstanding dues.
Flexible Payment Options
To facilitate the settlement of tax dues falling in the ₹50,000 to ₹10 lakh category, traders are offered the option to pay only 20 percent of the dues. Alternatively, they can opt for a partial payment of the tax, interest, and fines to resolve disputes comprehensively. In the remaining three categories, traders can pay the stipulated portions of the tax, interest, and fines to bring closure to their outstanding dues. Notably, those opting for settlement under the scheme will have the accrued interest on tax arrears waived until the amount is paid in full.
Commencement and Duration
The Samadhan scheme is set to commence on October 16, 2023, and will remain in force until February 14, 2024. This time frame provides traders with a window to take advantage of the scheme and settle their outstanding tax dues.
Key Features of the New Samadhan Scheme:
- Complete Waiver for Dues Below ₹50,000: The scheme introduces a groundbreaking provision, offering a complete waiver of tax arrears, interest, and penalties for dues below ₹50,000 for every assessment year. This measure is anticipated to bring substantial relief to over 95,000 small traders.
- Structured Concessions for Various Categories: Traders falling in the ₹50,000 to ₹10 lakhs category can settle their disputes by paying only 20% of the dues or a portion of the tax, interest, and fines. Similarly, for the other three categories, traders have the option to pay the stipulated portion of the tax, interest, and fines to resolve their disputes.
- Property Return for Traders in Higher Categories: Notably, traders falling into higher outstanding categories will have the opportunity to reclaim properties that were previously attached as part of the disputes. This represents a departure from previous Samadhan schemes, which provided flat-rate concessions without differentiation based on outstanding dues.
- Accrued Interest Waiver: Individuals opting to settle their dues under the scheme will benefit from a complete waiver of accrued interest on tax arrears until the amount is paid, providing additional financial relief.
- Commencement and Duration: The Samadhan scheme is set to commence on October 16, 2023, and will remain in force until February 14, 2024, allowing a limited window for traders to take advantage of the offered concessions.
Conclusion
The Tamil Nadu government’s announcement of the Samadhan scheme represents a groundbreaking effort to address and resolve pending tax arrears and disputes. The categorization of tax dues, along with tailored waivers and concessions, reflects a thoughtful approach to providing relief to different segments of traders. The return of attached properties and the waiver of accrued interest further enhance the appeal of this scheme. As it takes effect, the Samadhan scheme is expected to not only alleviate the burden on small traders but also streamline the resolution of tax disputes in the state.
