The Government of Maharashtra has introduced an amnesty scheme, ‘Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2023’ (“Amnesty Scheme”) for various taxes levied by the State of Maharashtra prior to introduction of Goods and Services Tax (“GST”).

The relevant acts covered under the Amnesty Scheme (“Relevant Act”) are:

  1. Central Sales Tax Act, 1956.
  2. Bombay Sales of Motor Spirit Taxation Act, 1958.
  3. Bombay Sales Tax Act, 1959.
  4. Maharashtra Purchase Tax on Sugarcane Act, 1962.
  5. Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.
  6. Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985.
  7. Maharashtra Tax on Luxuries Act, 1987.
  8. Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987.
  9. Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract (Re-enacted) Act, 1989.
  10. Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002.
  11. Maharashtra Value Added Tax Act, 2002 (“MVAT Act”)

The Amnesty Scheme will come into force on May 1, 2023.

Eligibility

Any applicant registered or not, will be eligible to make an application for settlement of arrears of tax, interest, penalty or late fee in respect of the specified period under the Relevant Act, whether such arrears are disputed in appeal or not. Any applicant who has availed benefits under previous schemes is also eligible under the Amnesty Scheme, provided that the benefit is not in respect of arrears for which application is made under previous schemes.

Determination of amount payable and extent of waiver under the Amnesty Scheme

1. Arrears of INR 2,00,000 (Indian Rupees two lakh) or less:

  1. Full waiver of arrears for any year (as per any statutory order).
  2. Full waiver of post-assessment interest and penalty provided that, the tax due is discharged prior to April 30, 2023, and no order levying interest or penalty has been passed.

2. Arrears of INR 50,00,000 (Indian Rupees fifty lakh) or less:

Waiver of 80% of amount of arrears as per any statutory order, if the applicant opts for a lump sum payment of such arrears.

3. Arrears of more than INR 50,00,000 (Indian Rupees fifty lakh):

Options available for settlement of arrears more than INR 50,00,000 (Indian Rupees fifty lakh):

  1. One time payment/ lumpsum payment.
  2. Payment in instalments.

Other key considerations

  1. No waiver will be granted in respect of undisputed tax6.
  2. Refund matters will not be eligible for benefits under the Amnesty Scheme.
  3. Any payment made on any account on or before April 30, 2023 will not be considered as payment towards the requisite amount.
  4. In case less than the requisite amount is paid, proportionate adjustment will be permitted.
  5. Appeal, if any, pending before the Appellate Authority under the Relevant Act or the tribunal or the court in respect of any statutory order, to be withdrawn fully and unconditionally by the applicant.