FAQ’s on Settlement of Arrears in Dispute Act, 2016

8th floor, Vikrikar Bhavan,

Mazgaon, Mumbai-400010.

TRADE CIRCULAR

To,

……………………….

……………………….

 

No. VAT/MMB-2015/47/2016-17/ADM-8                                                                              dated 30th June 2016.

Trade Cir. No. 19T of 2016

Subject : FAQ’s on Settlement of Arrears in Disputes Act, 2016.

Ref. : (1) The Maharashtra Settlement of Arrears in Disputes Act, 2016. (Act No. XVI of 2016)

           (2) Trade Circular No. 10T of 2016 dated 3rd May 2016.

Gentlemen/ Sir/ Madam,

You are well aware that the Maharashtra Settlement of Arrears in Disputes Act, 2016 (hereinafter referred to as “the Settlement Act”) has come into force with effect from 26th April 2016. In order to disseminate the information and set out the process of Settlement of Arrears in Dispute in motion the Trade Circular cited at Ref.-(2) above was issued. With regards to the Settlement Act representations have been received from the Trade and Associations about the scope of the said Act and the procedure to be followed.

This office has considered the same and decided to clarify the points raised through such representations. In view of this a Trade Circular in the form of questions and answers is being issued. It is further clarified that the subsequent set of FAQ’s will be added from time to time.

Sd/-

(Rajiv Jalota)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.

FAQ’S

(Dated 30th June 2016)

1. Which are the Acts that are covered under the Settlement Act?

Ans. The Maharashtra Settlement of Arrears in Disputes Act, 2016 provides the opportunity of settlement of arrears in disputes that have arisen as a result of any Statutory order passed under the below given Acts administered by the Maharashtra Sales Tax Department:

(a) the Central Sales Tax Act, 1956;

(b) the Bombay Sales of Motor Spirit Taxation Act, 1958;

(c) the Bombay Sales Tax Act, 1959;

(d) the Maharashtra Purchase Tax on Sugarcane Act, 1962;

(e) the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975;

(f) the Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985; (g) the Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987;

(h)the Maharashtra Tax on Luxuries Act, 1987;

(i) the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract (Re-enacted) Act, 1989;

(j) the Maharashtra Tax on Entry of Goods into Local Areas Act, 2002; (k) the Maharashtra Value Added Tax Act, 2002,

2. For which period(s) the Arrears in Disputes may be settled under the Settlement Act, 2016?

Ans. The Maharashtra Settlement of Arrears in Disputes Act, 2016 provides the Settlement of Arrears in Disputes for any period ending on or before 31st March 2012.

3. What is the extent of the waiver for the demand raised by statutory order in respect of Tax, Interest and Penalty?

Ans. The Maharashtra Settlement of Arrears in Disputes Act, 2016 provides the Settlement of Arrears in Disputes only in respect of interest and penalty amount.

It should be kept in mind that this Act does not provide any relief towards the Tax determined as payable by any Statutory Order.

The waiver in respect of Interest and Penalty will depend upon the period of Arrears in Disputes. The details are presented in the TABLE below:

(a) For periods ending on or before 31st March 2005.

 TABLE-1

UNDISPUTED AMOUNT

Sr. No. Particulars Amount to be paid Extent of Waiver
1. Tax 100% NIL
2. Interest 100% NIL
3. Penalty 100% NIL

TABLE-2

DISPUTED AMOUNT

Sr. No. Particulars Amount to be paid Extent of Waiver
1. Tax 100% NIL
2. Interest NIL 100%
3. Penalty NIL 100%

 (b) For periods starting on or after 1st April 2005 and ending on or before 31st March 2012.

 TABLE-3

UNDISPUTED AMOUNT

Sr. No. Particulars Amount to be paid Extent of Waiver
1. Tax 100% NIL
2. Interest 100% NIL
3. Penalty 100% NIL

TABLE-4

DISPUTED AMOUNT

Sr. No. Particulars Amount to be paid Extent of Waiver
1. Tax 100% NIL
2. Interest 25% 75%
3. Penalty NIL 100%

4. Whether benefits under Settlement Act in respect of the Undisputed. Dues can be claimed?

Ans. No, the benefits of waiver in respect of dues Viz., Interest and Penalty is available only in respect of disputed amount. If dealer has in the Appeal memo or during the pendency of Appeal stated any amount payable as per Statutory Order as undisputed then no waiver is provided in respect of said undisputed amount, notwithstanding that the amount is interest or penalty.

5. Under Settlement Act what is the meaning of ‘Arrears in Dispute’?

Ans. For the purposes of Settlement Act the Arrears in Dispute should satisfy the following ingredients,-(1) it is a Tax, interest or, as the case may be, penalty payable as per any Statutory Order passed under the Relevant Act(s);

(2) appeal has been filed against aforesaid order;

(3) the appellate authority has granted the stay either in full or part of the recovery of the demand so raised.

(4) the stay so granted is effective at least till the date of appeal withdrawal order.

6. For the Settlement of Arrears in Dispute which Form needs to be filled by the applicant?

Ans. The applicant who desires to avail the benefits under the Settlement Act needs to submit a duly filled application in Form-1  appended to the Trade Circular No. 10T of 2016 issued on 3rd  May 2016.

7. Where is the Application in Form-1 to be filed?

Ans. The Application in Form-1 for the Settlement of Arrears in Dispute must be submitted to the Nodal Officer to whom said case is assigned. For details please refer Para-3 (Page-2) of the Trade Circular 10T of 2016 dated 3rd May 2016.

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