Haryana One Time Settlement Scheme 2025, The Haryana government has introduced the Haryana One Time Settlement Scheme for Recovery of Outstanding Dues, 2025 (OTS-2025), a significant initiative aimed at providing relief to traders, small shopkeepers, and businesses burdened by pending tax liabilities from the pre-GST era. Launched on March 23, 2025, by Chief Minister Nayab Singh Saini in Kurukshetra, this scheme seeks to simplify the tax settlement process, reduce litigation, and boost state revenue while fostering a transparent and equitable taxation system. Operational from April 1, 2025, for a period of 180 days, the OTS-2025 offers substantial waivers on interest and penalties, making it an attractive opportunity for taxpayers to clear their dues and start afresh. This article delves into the key features, benefits, eligibility, and application process of the scheme, providing a complete guide for taxpayers.
Haryana One Time Settlement Scheme 2025
Background and Objectives
The OTS-2025 builds on the success of previous settlement schemes, such as the OTS-2023, and addresses longstanding demands from Haryana’s trading and business community to resolve outstanding tax dues accrued before the implementation of the Goods and Services Tax (GST) on July 1, 2017. The scheme is designed to:
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Minimize Litigation: By offering a simplified settlement process, the scheme reduces the number of tax-related disputes clogging the judicial system.
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Ease Financial Burdens: Waivers on interest and penalties provide significant relief to small and medium traders facing financial constraints.
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Boost Revenue Collection: The scheme incentivizes timely settlements, enabling the state to recover substantial outstanding dues.
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Promote Economic Growth: A transparent and straightforward tax system encourages business growth and attracts investment.
Haryana, known for its robust tax infrastructure and ranking among the top states in GST collection, aims to recover a significant portion of the estimated ₹30,000 crore in outstanding dues through this initiative. Chief Minister Saini emphasized that “a simple and transparent tax system promotes economic growth,” highlighting the scheme’s role in fostering a business-friendly environment.
Key Features of the OTS-2025
The OTS-2025 is a well-structured scheme covering outstanding dues under various pre-GST state tax laws up to June 30, 2017. Below are its salient features:
1. Applicability
The scheme applies to outstanding dues under the following acts:
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Haryana Value Added Tax Act, 2003
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Central Sales Tax Act, 1956
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Haryana Tax on Luxuries Act, 2007
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Haryana Tax on Entry of Goods into Local Areas Act, 2008
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Haryana Local Area Development Tax Act, 2000
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Punjab Entertainment Fee Act (as applicable in Haryana)
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Haryana General Sales Tax Act, 1973
It covers quantified outstanding dues, including tax, interest, and penalties, for both registered and unregistered assessees, except those involved in criminal proceedings or cases related to erroneous refunds.
2. Waiver and Payment Slabs
The OTS-2025 introduces a simplified payment structure with significant waivers, categorized based on the outstanding tax amount:
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Dues up to ₹1 lakh: Complete waiver of tax, interest, and penalties, benefiting approximately 1.5 lakh small traders.
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Dues between ₹1 lakh and ₹10 lakh: Taxpayers receive a 60% waiver on tax, interest, and penalties, paying only 40% of the balance after a rebate of up to ₹1 lakh.
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Dues between ₹10 lakh and ₹10 crore: A 50% waiver on tax, interest, and penalties, requiring payment of 50% of the outstanding amount.
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Dues above ₹10 crore: Taxpayers must pay 100% of the assessed amount, with no waivers.
These slabs eliminate the complex tax categorizations of the OTS-2023 (e.g., undisputed vs. disputed taxes), making the process more accessible. Additionally, penalties and interest are fully waived across all eligible cases, reducing the financial burden on taxpayers.
3. Payment Options
The scheme offers flexible payment options to accommodate businesses of varying financial capacities:
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Lump Sum Payment: Dues up to ₹10 lakh must be paid in a single payment before the scheme’s deadline.
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Installments for Higher Dues: For dues above ₹10 lakh, taxpayers can opt for two installments, with the payment schedule to be completed within the 180-day window (by September 30, 2025).
This flexibility ensures that businesses can settle their dues without undue financial strain.
4. Operational Period
The scheme is effective from April 1, 2025, to September 30, 2025 (180 days). Applications and payments must be completed within this period, and non-compliance may result in the withdrawal of provisional settlement orders, with dues pursued under regular tax proceedings.
5. No Appeal Against Settlement Orders
Final settlement or rejection orders issued under the scheme are conclusive and cannot be appealed. This provision ensures swift resolution and prevents further litigation.
Eligibility Criteria
The OTS-2025 is open to:
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Any assessee or person liable to pay outstanding dues under the relevant acts, whether registered or not.
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Applicants with quantified outstanding dues uploaded by the jurisdictional authority in Form GST DRC-07A under the Haryana GST Act.
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Taxpayers whose applications under the OTS-2023 were not rejected before the appointed day of OTS-2025.
However, the scheme excludes:
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Applicants facing criminal proceedings.
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Cases involving erroneous refunds.
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Dues related to assessments completed after March 31, 2023, in some cases, as specified in prior schemes.
Taxpayers must withdraw any pending appeals related to the dues as a precondition for settlement.
Application Process
The application process for OTS-2025 is fully online, ensuring transparency and ease of access:
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Submit Application: File Form OTS-1 on the official website of the Haryana Excise and Taxation Department (likely accessible via a dedicated portal). A single application can cover all assessment years for a specific act.
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Provide Details: Include registration details, mobile number, and proof of payment or prior deposits.
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Payment: Pay the settlement amount (lump sum or first installment) as per the applicable slab. Payments must be deposited under the treasury head of the relevant act.
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Acknowledgment: A system-generated acknowledgment in Form OTS-2 is issued electronically upon submission.
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Processing: The jurisdictional authority reviews the application, issues a provisional settlement order, and may rectify errors if needed. A final settlement order is issued upon compliance with payment terms.
Applications must be submitted within the 180-day window, and taxpayers are advised to consult professionals to ensure accurate filing.
Benefits of the OTS-2025
The OTS-2025 offers numerous advantages for taxpayers and the state:
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Financial Relief: Complete or partial waivers on tax, interest, and penalties reduce the financial burden, particularly for small traders.
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Simplified Process: The removal of complex tax categorizations and a streamlined online application process make compliance easier.
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Litigation Reduction: By settling disputes amicably, the scheme frees up judicial resources and reduces legal costs for businesses.
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Fresh Start: Clearing old dues allows businesses to focus on current operations and comply with GST regulations.
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Revenue Boost: The state expects to recover significant dues, contributing to economic growth and infrastructure development.
The scheme is projected to benefit approximately 2 lakh small and medium traders, with an estimated recovery of substantial revenue for Haryana.
Improvements Over OTS-2023
The OTS-2025 addresses several limitations of the OTS-2023, which was operational from January 1 to March 30, 2024:
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Simplified Slabs: Unlike OTS-2023’s four categories (e.g., undisputed taxes at 100%, disputed taxes at 30–50%), OTS-2025 uses amount-based slabs with broader waivers.
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Extended Duration: The 180-day window provides more time for compliance compared to OTS-2023’s 90 days.
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Complete Penalty Waiver: OTS-2025 eliminates penalties entirely, unlike OTS-2023, which offered partial waivers in some cases.
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Enhanced Accessibility: Issues like complex classifications and limited installment options have been resolved, making the scheme more inclusive.
These improvements reflect the government’s commitment to addressing feedback from traders and ensuring maximum participation.
Additional Initiatives
Alongside the OTS-2025, the Haryana government has introduced measures to enhance tax compliance and transparency:
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Consolidated GST Audits: To reduce compliance burdens.
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CCTV Installation: In tax offices to ensure transparency.
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GST Rule Reforms: Recommendations for automating refunds and raising billing thresholds.
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GST Training Institute: Planned in collaboration with HIPA, Gurugram, to educate taxpayers and professionals.
These initiatives underscore Haryana’s holistic approach to building a robust tax ecosystem.
Challenges and Recommendations
While the OTS-2025 is a progressive step, taxpayers may face challenges such as:
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Awareness: Small traders in rural areas may lack knowledge of the scheme’s benefits and application process.
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Technical Issues: Online filing may pose difficulties for those unfamiliar with digital platforms.
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Financial Constraints: Even with waivers, some businesses may struggle to pay within the 180-day window.
To address these, the government could:
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Conduct awareness campaigns through trade associations and local bodies.
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Offer helplines and support centers for online filing.
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Extend the installment option to smaller dues (e.g., ₹1–10 lakh) for greater flexibility.
Taxpayers are advised to consult GST consultants or chartered accountants to navigate the scheme effectively and avoid errors in application or payment.
Conclusion
Haryana One Time Settlement Scheme 2025, is a landmark initiative that balances taxpayer relief with state revenue goals. By offering substantial waivers, flexible payment options, and a simplified process, the scheme empowers businesses to resolve pre-GST tax liabilities and contribute to Haryana’s economic growth. With its operational window open until September 30, 2025, traders and entrepreneurs are encouraged to seize this opportunity to clear their dues and embrace a future of compliance and prosperity.
For detailed information and to apply, visit the official Haryana Excise and Taxation Department website or refer to Notification No. 21/ST-1, dated March 27, 2025.