Delhi One-Time Tax Amnesty Scheme to Resolve Pre-GST VAT and Excise Disputes

If you’re a trader in Delhi dealing with ongoing tax disputes related to pre-GST VAT, excise, or service tax, the Delhi One-Time Tax Amnesty Scheme could soon bring you some relief. This scheme by the Delhi government is started to resolve long-standing disputes and ease the burden of litigation while supporting a healthy business environment. Knowing who can benefit and how the scheme works can help you get ready to take advantage of this special chance.

Who Can Benefit from the One-Time Tax Amnesty Scheme?

The scheme is aimed at traders caught up in tax disputes from before GST was introduced in July 2017. Specifically, it helps those with contested dues related to VAT, excise, and service tax. With over 3.5 lakh traders currently involved in such tax cases with the Delhi government, many individuals and businesses from different sectors can get meaningful relief.

Details of Pre-GST Tax Issues Covered

The amnesty covers several tax categories, including:

• Value-Added Tax (VAT): Disputes about VAT dues and assessments before GST came into effect.
• Excise Tax: Issues with excise duties charged on various goods before GST.
• Service Tax: Pending cases about service tax liabilities from before GST started.

These cases have often stayed in courts for a long time, delaying settlements and causing administrative delays. The proposed scheme aims to resolve these old issues efficiently.

How the Amnesty Scheme Will Work

The main feature of the scheme is the waiver of penalties and interest on disputed taxes. This approach speeds up recovery of the actual tax dues and encourages traders to come forward and clear their outstanding amounts.

Expected Benefits for Traders and Government

Steps Traders Need to Follow to Participate

Traders interested in the amnesty should wait for the official launch and notify the trade and taxes department. While exact procedures will be finalized after cabinet approval, here’s a general outline:

• Submit an application with details of your disputed tax cases.
• Provide the required documents about tax dues, assessments, and ongoing disputes.
• Pay the outstanding principal tax amount as per scheme rules without any interest or penalty.
• Follow up with department communications for verification and final scheme approval.

It’s a good idea to keep all related tax documents handy and consult tax professionals for smooth participation.

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Previous Attempts and Current Status

This is not the first time the Delhi government has considered a tax amnesty scheme. During the 2022–23 budget session, then Finance Minister Manish Sisodia announced a similar plan. However, it was never put into action due to various administrative and procedural obstacles.

Right now, a new proposal with penalty and interest waivers is being prepared by the trade and taxes department and shared with finance, planning, and law departments. After review, the plan will go to the cabinet for approval.

If approved, the scheme will bring much-needed relief to traders while increasing revenue collection to support Delhi’s Rs 1 lakh crore budget for 2025-26, where Rs 68,700 crore is expected from tax revenue, mostly from GST and VAT.

Keep watching official Delhi government sources for announcements on the One-Time Tax Amnesty Scheme and get ready to make the most of this scheme.