The Government of Bihar issued The Bihar Settlement of Taxation Disputes Act, 2024, marks a significant step in streamlining the resolution of taxation disputes within the state of Bihar. This legislation introduces a framework for the settlement of various tax-related disputes through a structured and defined process.
Key Definitions
To understand the Act, it’s crucial to grasp the key terms used:
- Admitted Tax: The amount of tax recognized as payable in the returns filed by the taxpayer.
- Appeal: Refers to cases pending before the Additional Commissioner of State Tax (Appeal) or similar authorities under specified laws.
- Arrear Tax, Penalty, Interest, or Fine in Dispute: This includes any outstanding amounts due as a result of various tax orders.
- Dispute: Any pending proceedings related to tax, interest, fine, or penalty that have not been fully paid or are under recovery.
- Settlement Amount: The specific amount required to settle a dispute under this Act.
Chapter II: Settlement of Disputes
Settlement Amount
Disputes may be settled upon payment of a specified settlement amount:
- Arrear of Tax due to Missing Certificates/Declarations:
Settlement Amount: 100% of the remaining balance, reduced by the value of the certificates/declarations in possession or the amount already paid.
- Other Arrears of Tax:
Settlement Amount: 35% of the arrear of tax in dispute or the amount already paid, whichever is higher.
- Penalty, Fine, or Interest Disputes:
Settlement Amount: 10% of the disputed amount or the amount already paid, whichever is higher.
Explanation: The settlement amount does not include any payment towards admitted tax, which must be paid in full.
- Credit for Deposits: Amounts already deposited in respect of the dispute will be considered towards the settlement amount.
- No Refund: Excess payments made beyond the settlement amount will not be refunded.
- Conclusive Settlement: Once the settlement amount is paid, the dispute is considered concluded and cannot be continued by any authority or court.
- Effect on Ongoing Proceedings: Settling a dispute will result in the disposal of any pending revision, reference, writ petition, or special leave petition related to the dispute.
Chapter III: Manner of Settlement of Disputes
4. Application for Settlement
Parties wishing to settle a dispute must submit an application to the prescribed authority in the required form and manner, within the specified time.
5. Disposal of Application
- Applications will be considered only if they conform to the requirements of Section 4 and related rules.
- Applications will be processed in the manner and time prescribed by the rules.
6. Power to Make Rules
- Rule-Making Authority: The Government may make rules to implement the provisions of the Act.
- Scope: Rules may cover all matters necessary for the effective functioning of the Act.
Commencement:
The provisions of this Act will come into force on a date specified by the Commissioner of State Tax via a notification in the Official Gazette.
The Act will initially be in force for six months from the commencement date. The State Government has the authority to extend this period by up to six additional months through a notification.
Conclusion
The Bihar Settlement of Taxation Disputes Act, 2024, introduces a systematic approach to resolving tax disputes, aiming to provide a streamlined and effective mechanism for settling outstanding issues. By defining clear settlement amounts and procedures, the Act seeks to enhance efficiency and reduce prolonged litigation, benefiting both the tax administration and the taxpayers.
