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The Punjab government has extended the deadline for its One-Time Settlement (OTS) Scheme 2025 till September 30, giving taxpayers more time to resolve pending tax disputes related to the pre-GST period. The scheme offers waivers on interest and penalties along with relief on principal tax under specified slabs. The state has received nearly 9,800 applications so far, with significant tax collections and relief granted. At the same time, the Excise and Taxation Department has intensified recovery action against habitual VAT defaulters and plans to continue strict enforcement after the revised deadline.
The Punjab government has extended the deadline for its One-Time Settlement (OTS) Scheme 2025 till September 30, allowing taxpayers additional time to clear pending tax liabilities related to the period before the implementation of the Goods and Services Tax (GST). The earlier deadline was set to expire at the end of the past week.
The OTS Scheme is aimed at resolving legacy tax disputes arising under the previous indirect tax regime that existed before GST was introduced across India on July 1, 2017. Under the scheme, eligible taxpayers can settle outstanding cases by availing waivers on interest and penalties, along with slab-wise relief on the principal tax amount.
Punjab Finance, Excise and Taxation Minister Harpal Singh Cheema said the extension was granted following strong demand from taxpayers seeking additional time to avail the benefits under the scheme. He stated that the revised deadline would provide another opportunity for eligible taxpayers to regularise pending dues and close long-standing tax disputes.
According to the minister, the state had received 9,782 applications under the scheme as of the previous week, covering a total tax demand of INR 437.51 crore. Taxpayers have deposited INR 167.23 crore, while the government has provided relief amounting to INR 534.54 crore through waivers of tax, interest and penalties.
Cheema further said that around 9,386 eligible taxpayers are yet to avail the scheme and can still benefit from a 100 per cent waiver of interest and penalties, along with slab-based relief in the principal tax amount before the revised deadline.
He added that the response to the scheme reflected growing taxpayer participation and confidence in the state's efforts to resolve legacy tax matters through a transparent settlement mechanism.
Alongside the relief measures, the Punjab Excise and Taxation Department has stepped up recovery proceedings against habitual Value Added Tax (VAT) defaulters. The minister said the department has been attaching and auctioning properties of defaulting taxpayers, resulting in recoveries of more than INR 12.39 crore. He also noted that several defaulters chose to opt for the OTS Scheme after enforcement proceedings were initiated against them.
The department has also scheduled 13 auction proceedings in August to recover around INR 48.48 crore in outstanding dues. Taxpayers have been advised to settle their pending liabilities under the scheme before the auction process begins.
Cheema indicated that the extension till September 30 would be the final opportunity for taxpayers to resolve pre-GST disputes under the scheme. He said no further extension is proposed beyond the revised deadline. After that, the department will intensify recovery action under applicable tax laws and the Punjab Land Revenue Act, including freezing bank accounts and auctioning attached properties.
The minister also said the Excise and Taxation Department is supporting the Supreme Court's SAMADHAN initiative, which seeks to encourage the amicable settlement of tax disputes. He informed that 12 major tax disputes have already been resolved under the initiative, while four more cases are currently under the settlement process.
The Punjab government had introduced the OTS Scheme to reduce litigation related to the pre-GST tax regime and improve tax recovery by encouraging voluntary compliance. Similar settlement schemes have been introduced by several states over the years to clear long-pending indirect tax disputes that remained unresolved after the nationwide rollout of GST.
Source PTI
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