Maharashtra Government proposes amnesty scheme for PSUs with regard to arrears of erstwhile indirect taxes

 

This Tax Alert summarizes the recent “Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee (Payable by Public Sector Undertaking Companies) Bill, 2025¹ introduced pursuant to the Maharashtra State Budget 2025-2026.

The Government of Maharashtra has proposed an amnesty scheme for Public Sector Undertakings (PSUs) with regard to arrears of various taxes levied before the introduction of Goods and Services Tax (GST).

The applications under the scheme shall be made at any time after the date enactment of the Bill but not later than 30 days from the last date of payment of requisite amount i.e. 31 December 2025.

The requisite amount payable as per the scheme shall be calculated in the following manner:

Particulars	Matters pertaining to period on or before 31 March 2005		Matters pertaining to period 1 April 2005 to 30 June 2017
	Amount to be paid	Amount of waiver	Amount to be paid	Amount of waiver
Undisputed tax	100%	Nil	100%	Nil
Disputed tax	30%	70%	50%	50%
Interest	Nil	100%	Nil	100%
Penalty	Nil	100%	Nil	100%
Late fee	-	-	Nil	100%

Any Payments made before the commencement date of the Act or after 31 December 2025 shall not be considered under the scheme.

Similarly, any refunds adjusted or deemed to be adjusted against arrears before the commencement date of the Act or during the period upto 31 December 2025 shall not be considered as payment towards the requisite amount.

Comments:

a. This scheme for PSUs appears to be more attractive than the scheme which was introduced in 2022 and 2023 for all the taxpayers. PSU entities who may have missed availing benefit earlier may take benefit under this scheme.

b. An amnesty scheme introduced for the third time by Maharashtra Government signifies its intent to resolve a long-standing indirect tax disputes and unlock the sizeable portion of tax dues in pending litigations.