To bring Punjab’s economy back on track, CM Bhagwant Mann reaches out to Arvind Subramanian

The state government, it is learnt, has sought from Subramanian to help the state with solutions so that it is able to spend on capital expenditure and contribute to development. With freebies bleeding the exchequer dry, the state is unable to spend much under the capital expenditure head.

The issue of freebies in the form of power subsidy to agriculture sector and domestic sector to the tune of Rs 20,000 crore also came up for discussion in the meeting, a source told The Indian Express. He said that the meeting also discussed how to increase collections from its own tax resources.

The source said that the economist asked the CM and Cheema as to how they were planning to keep the state afloat financially with so much of burden of subsidies. A suggestion of rationalisation of freebies was also made, a source said. He added that the suggestion did not find any response from the CM.

“Rationalisation of subsidy is a political decision. The government will not be in any position to take a decision to this effect. It will continue,” said a functionary of the government.

Two days ago, finance minister Cheema had also met Subramanian in Chandigarh. The state is staring at an acute funds crunch with the finance department already apprising the Chief Minister that it would not be able to pay salaries to the staff by September, if measures were not taken.

It is learnt that with the meeting in Chandigarh remaining inconclusive, it was decided to hold another meeting after July 10 bypoll in Jalandhar.

The state is now preparing to seek a bailout package from the 16th Finance Commission. The Commission would be coming to Punjab in the last week of July.

Cheema extends last date for OTS for recovery of outstanding dues

Punjab government’s one-time settlement ( OTS ) scheme for resolving value-added tax ( VAT ) arrears has paid dividends with the state collecting Rs 130 crore since December. After registering encouraging response, the government has now extended extended the last date for filing applications under the scheme for recovery of dues to August 16.

Cheema said the extension of the scheme’s deadline is aimed to reduce the compliance burden of legacy cases and enable trade and industry to enhance their compliance under the GST regime.

The Punjab One Time Settlement Scheme for Recovery of Outstanding Dues, 2023, implemented from November 15, 2023, offers a one-time opportunity for taxpayers to settle their outstanding dues. The scheme was initially valid till June 30, 2024, he said.

Taxpayers whose assessments were framed till March 31, 2024, and all rectification or revision/assessment after remand orders passed till March 31, 2024, under the relevant Acts with a total demand (tax, penalty, and interest as per the original assessment order) up to Rs 1 crore as of March 31, 2024, are eligible to apply for settlement under this scheme, an official statement said.

Key benefits of the scheme include complete waiver of tax, interest, and penalty in case of arrears up to Rs 1 lakh as of March 31, 2024, and waiver of 100 per cent interest, 100 per cent penalty, and 50 per cent of the tax amount in cases with demands ranging from Rs 1 lakh to Rs 1 crore, the statement said.

Dealers can submit original statutory forms under CST Act, 1956, at the time of applying under OTS-2023, and waiver will be calculated accordingly, it said. Cheema said the Punjab government’s commitment was to support taxpayers and promote a tax-compliant culture.
He said the extended deadline provides more time for applicants to avail of this scheme.