AP Chambers for settlement scheme for indirect tax rows

Vijayawada: The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) in a representation to the state government, pleaded for the introduction of a settlement scheme for indirect tax disputes, according to president of AP Chambers Potluri Bhaskara Rao and general secretary B Rajasekhar.

The representation addressed to minister for finance Payyavula Keshav referred to similar successful initiatives implemented by other states and emphasised the need to address the significant backlog of unresolved disputes under previous indirect tax laws.

Bhaskara Rao stated that the Goods and Services Tax (GST) regime has simplified the taxation landscape, yet there remains a considerable volume of appeals and disputes under earlier indirect tax laws.

This backlog has led to two main challenges: for taxpayers, it results in blocked working capital and mounting litigation costs; for the government, it means thousands of crores in revenue remain tied up, limiting liquidity for developmental and welfare activities.

In light of these challenges, he highlighted the success of settlement schemes in other states, which have successfully reduced litigation and unlocked much-needed revenue. These schemes have allowed businesses to resolve legacy tax disputes while simultaneously easing the administrative burden on tax authorities, enabling them to focus on stabilising the GST framework.

Referring to the systems introduced in other states, he said that Maharashtra introduced a two-phase settlement scheme that offered significant waivers on taxes, interest, and penalties, while Kerala and Karnataka implemented similar schemes with 100 percent waivers on interest and penalties upon full payment of tax arrears.

West Bengal also introduced a flexible settlement scheme, offering taxpayers the opportunity to clear outstanding tax liabilities through instalment payments.

These states have effectively demonstrated that such settlement schemes can be an effective tool to resolve disputes, ease the financial burden on businesses, and mobilise crucial revenue for state development.

“AP Chambers strongly believes that AP can benefit greatly from a similar initiative, which would not only alleviate the burden on taxpayers but also streamline the State’s tax administration.”

Bhaskara Rao and B Rajasekhar urged the government to consider implementing a settlement scheme, drawing on the experiences and successes of other states, to provide a pathway for taxpayers to resolve historical disputes, unlock working capital, and reduce the cost of litigation.

In a representation to state finance minister, it stresses the need to address significant backlog of unresolved disputes under previous indirect tax laws