Just before the states are preparing themselves to meet the July 1 deadline of the GST
rollout, the West Bengal
government on Wednesday amended the state's taxation laws, offering the hotels, restaurants, bars and cable operators a one-time settlement window to clear their disputed dues at a discount rate of 50 per cent on the accumulated arrear tax
The West Bengal
Taxation Laws (Amendment) Bill, 2017, brought in by the government, will amend the Bengal Amusements Tax
Act of 1922, the West Bengal
Entertainments and Luxuries (Hotel and Restaurants) Tax
Act, 1972, the West Bengal
Act, 1982 and the West Bengal
(Settlement of Disputes) Act of 1999.
With the amendment, the government will offer waiver on penalty and interest of the accumulated amount.
The move comes after Union Finance Minister Arun Jaitley and a majority of state finance ministers agreed upon the July 1 rollout date of the new tax
regime followin which indirect tax
collected by the state such as the value added tax, sales tax
and the entertainment and luxury tax, among others will be abolished.
West Bengal's finance minister, Amit Mitra, who is not happy with the GST
rollout date, has however, written to Jaitley, asking for postponement of the date. His argument is that small and medium sectors may be hit as they are still unprepared to function under the new tax
However, the ongoing litigations over disputed tax
amounts on the specified categories will go on even after the rollout date and will not be written off under the new tax
As per the state government, the amendment "seeks to provide relief to the taxpayers by introduction of settlement of disputes scheme for arrear tax
or penalty in cases pending in appeal or revision or under litigation." Disputed amount will be waived off upon payment of 50 per cent of the arrear tax, added the state.
The exact figure of pending and disputed arrear amount is yet to be known.
However, this is not the first instance wherein the state government has resorted to amending laws to offer a one-time settlement of dues for cases under litigation.
In December, 2016, the state government amended the West Bengal
Taxation Laws (Amendment) Bill, 2016, and The Bengal Excise (Amendment) Bill, 2016, which sought to provide a one-time settlement of disputed sales tax
and excise duty for the liquor sector.
Under that scheme, disputes could be settled by paying 30 per cent of the arrear tax
in cases related to disallowance of any claim of input tax
credit assessment. For other cases involving disputes related to turnover upon assessment, application of higher rate of tax
and others, a settlement involving payment of 60 per cent of the arrear tax
amount was suggested.