The Gujarat government on Tuesday, in the modified state budget for the year 2019-20, declared an amnesty scheme to fast-track the resolution of over 20,000 pending tax litigations that existed before the introduction of the Goods and Services Tax (GST). The amnesty scheme will cover industries and traders as well. Presenting tax proposals in the Legislative Assembly on Tuesday, Deputy Chief Minister Nitin Patel said, “Before the introduction of GST, various taxes like Sales Tax, VAT, Motor Spirit Tax, CST, Entry Tax, Sugarcane Purchase Tax etc were in force. Over 20,000 litigations pertaining to these taxes are pending at different stages.” Patel said adding that various industry and trade associations had approached the government for such a scheme. He said that it would help the government recover old dues and reduce administrative expenditure.
The scheme will remain operative for a period of six months beginning August 15, 2019. “If the outstanding amount of tax is paid during the period of the amnesty scheme, liberal relief will be granted in interest and penalty,” Patel told the House. The benefit of the scheme will be available to those traders and service providers against whom the original demand is less than Rs 100 crore. “The detailed scheme will be announced shortly,” Patel said. In other tax proposals, the state government increased the rate of Electricity Duty (ED) levied on self-generation from conventional resources for captive consumption by industries. The rates were last revised in 2013. “Most of the industrial undertakings in the state procure electricity from power distribution companies and ED is levied at a rate of 15 percent on the same, which comes to about Rs 1.50 per unit as per the current price. The rate of ED on captive consumption is 55 paise per unit,” Patel said, increasing ED for captive consumption to 70 paise per unit. “I also propose to link the rate with the Wholesale Price Index and to change the rates annually in accordance with WPI,” the deputy CM said. The move is expected to increase tax revenues by Rs 180 crore in the current financial year and by approximately Rs 270 crore annually.