Punjab Govt Extends One-Time Settlement Scheme for Clearing Pre-GST Arrears’ Deadline to March 31, 2026

The Punjab Government has extended the deadline for its One-Time Settlement (OTS) scheme, designed for the recovery of outstanding pre-Goods and Services Tax (GST) tax dues, to March 31, 2026. This extension aims to provide relief to taxpayers burdened with pending liabilities related to VAT, Central Sales Tax, and other pre-GST laws, and to avoid further litigation. Finance Minister Harpal Singh Cheema stated the decision followed requests from various stakeholders, acknowledging the heavy compliance burden taxpayers faced in late 2025 due to overlapping tax filing deadlines.

The OTS scheme, introduced in October 2025, offers taxpayers a way to settle legacy disputes by providing potential waivers of up to 100% of interest and penalties, alongside the principal tax amount, depending on the amount owed. The government hopes this will unlock blocked revenue and reduce prolonged legal battles.

In 2024, a similar OTS scheme successfully resolved VAT arrears, collecting ₹62.29 crore from 44,503 traders. The minister encouraged rice millers and other eligible firms to utilize this final opportunity to clear their arrears and begin the next financial year without tax liabilities.

(Source：Taxscan)