GST council may cut upfront payment for tax appeal to 7%

The Goods and Services Tax Council, at its meeting on June 22, may consider a proposal to reduce upfront payment required to be deposited prior to filing of a tax appeal to 7% of disputed tax amount from 10% now, ET has learnt.

The council could also consider an amnesty scheme for disputes of the pre-GST regime and a proposal to make biometric-based Aadhaar authentication mandatory for suspicious persons seeking GST registration. Officials said the amnesty scheme, once approved by the council, may be announced in the budget. In the interim budget, the finance minister had announced an amnesty for small direct tax disputes involving up to ₹ 25,000.

They said though states and the Centre can implement amnesty schemes for pre-GST disputes on their own, a discussion at council will help bring uniformity in execution of the scheme. States have in the past come out with amnesty schemes for state taxes. "Businesses are urging the GST Council to prioritise an amnesty scheme to clear tax disputes arising from the goods and services tax implementation," Saurabh Agarwal, tax partner at EY, said.

The amnesty would provide a chance for businesses to settle past tax issues without heavy penalties and reduce the burden on courts, he added. The council may also look into the modalities of pre-deposits in cases where the industry has already made some deposits ahead of contesting tax demand.

"There will be many decisions to improve ease of doing business and, at the same time, further enhance the scrutiny process for risky taxpayers," a senior official told ET.

The official added that now that biometric-based Aadhaar authentication is successfully running in Gujarat and Andhra Pradesh and Puducherry on a pilot basis, the council may consider making it mandatory pan-India for suspicious and high-risk persons seeking GST registration.