In a move poised to significantly impact the business landscape, the Goods and Services Tax (GST) Council, during its forthcoming meeting on June 22, is set to deliberate on a proposal to lower the upfront payment for filing a tax appeal from the current 10% to 7% of the disputed tax amount. This potential reduction aims to alleviate the financial strain on businesses embroiled in tax disputes, according to sources consulted by the Economic Times.
Moreover, the Council is likely to explore the introduction of an amnesty scheme targeting disputes predating the GST regime. This initiative, coupled with a proposal to mandate biometric-based Aadhaar authentication for individuals flagged as suspicious in their GST registration applications, underscores a dual strategy of fostering compliance while easing the litigation burden on the judiciary.
Officials have indicated that the amnesty scheme, upon receiving the Council’s approval, may be formally announced in the upcoming budget. This follows the interim budget’s provision of an amnesty for minor direct tax disputes involving sums up to ₹ 25,000. Despite states and the central government possessing the autonomy to independently implement amnesty schemes for pre-GST conflicts, a coordinated approach discussed at the Council level is anticipated to standardize and streamline execution across jurisdictions. Historical precedents have seen states independently introducing amnesty schemes for state taxes, but a unified strategy is now being advocated.
Saurabh Agarwal, a tax partner at EY, emphasized the business community’s strong advocacy for prioritizing an amnesty scheme to resolve tax disputes stemming from the GST’s implementation. Such a scheme would offer businesses an opportunity to settle past tax issues without incurring severe penalties, thereby lessening the caseload on the courts.
In addition to these measures, the Council is also expected to address the nuances of pre-deposits in instances where industries have already made preliminary deposits prior to contesting tax demands. This approach aims to streamline the appeals process and enhance operational efficiency.
A senior official remarked that forthcoming decisions would aim to bolster the ease of doing business while simultaneously intensifying scrutiny for high-risk taxpayers. The official noted the successful pilot implementation of biometric-based Aadhaar authentication in Gujarat, Andhra Pradesh, and Puducherry. Given this success, the Council may consider extending this mandatory authentication requirement nationwide for individuals deemed suspicious or high-risk in their GST registration attempts.
These deliberations and potential reforms reflect the Council’s ongoing commitment to balancing regulatory rigor with business facilitation, ensuring a robust yet supportive tax environment.