Delhi Govt Plans One-Time Tax Amnesty Scheme to Settle Pre-GST Disputes
By Author / July 10, 2025
Delhi News | GST Recent News – 2025
Relief Plan in the Works
The Delhi government is preparing to launch a one-time tax amnesty scheme aimed at settling long-pending pre-GST disputes. The scheme will cover legacy cases related to VAT, excise, and service tax.
According to a Times of India report, the trade and taxes department is drafting a proposal that may waive penalties and interest. This would help in faster tax recovery and reduce the burden of court cases.
Cabinet Approval Awaited
Sources revealed that the proposal will soon go to the Delhi cabinet for approval. If cleared, the scheme is expected to provide much-needed relief to traders and boost revenue collections. It will also ease the administrative load caused by tax litigation.
Legacy Disputes Run Deep
Currently, over 3.5 lakh traders are engaged in tax-related litigation with the Delhi government. Officials estimate that the total disputed amount exceeds ₹15,000 crore. However, the actual unrecovered tax value is believed to be around ₹5,500–₹6,000 crore. The rest includes interest and penalties.
Most of these disputes date back to before July 2017, when GST was introduced.
Addressing Court Backlogs
A Delhi government official said, “Several of these cases are stuck in courts, causing delays. The amnesty scheme will reduce the legal burden and give traders a clean slate.”
The trade and taxes department has already submitted the initial draft to the finance department. Before cabinet consideration, the proposal must also be vetted by the planning and law departments.
Not the First Attempt
This isn’t the government’s first effort. During the 2022–23 budget, then Finance Minister Manish Sisodia proposed a similar amnesty. However, the earlier scheme was never implemented.
Trader Community’s Long-Standing Demand
Officials said that Delhi’s trader groups have repeatedly requested an amnesty scheme. They bring up the issue in nearly every meeting with the Chief Minister, often linking it to market redevelopment and tax reforms.
Revenue Recovery to Strengthen Finances
Recovering old dues will not only improve Delhi’s financial health but will also reduce legal expenses. The government spends significantly on handling tax recovery cases in court.
The GST and VAT are Delhi’s largest sources of tax revenue. In the ₹1 lakh crore budget for FY 2025–26, the Delhi government expects ₹68,700 crore from taxes—₹49,000 crore of that from GST and VAT alone.
