Government mulling one-time settlement for businesses over minor GST offences

Willful tax evasion will not be covered by the scheme. Repeat offenders will also not be eligible.

The government is mulling offering businesses a one-time opportunity to settle Goods and Services Tax (GST) disputes and avoid litigation, The Economic Times reported citing officials.

As part of the scheme, only minor GST offences will be covered.

The plan will need the approval of the GST Council, the apex decision-making body for the indirect tax.

Willful tax evasion will not be covered by the scheme, one of the officials said. Repeat offenders will also not be eligible.

Another official said the idea is to declutter courts and dispose of cases that arise from differences in the interpretation of GST provisions.

It is likely that the scheme will be similar to the Centre's 'Sabka Vishwas Scheme' of 2019, which aimed to resolve all legacy tax and excise disputes.

The GST Council is already working on dedicated tribunals for dispute resolution.

In the interim, officials said a one-time dispute resolution mechanism might speed up the resolution of small disputes. Setting up tribunals may take some time.

"There are instances where the department has spent more money on pursuing the litigation than the tax claims," one official quoted by ET said, making a case for this one-time settlement scheme.

People with knowledge of the matter said that the industry has also approached the government about such a scheme.

- Money control