Industry bodies across India are pressing for a one-time closure scheme to resolve pending VAT assessments and disputes that date back to the pre-GST era. Businesses argue that the continuation of legacy assessments has created a prolonged state of legal and financial uncertainty, especially when assessments are reopened years after filings were made. The proposed closure scheme would allow taxpayers to settle outstanding matters by paying the principal tax amount, with partial or full waivers on interest and penalties. Such a measure, industry leaders believe, would bring much-needed finality to cases and allow businesses to focus fully on GST compliance and operational growth.

The call for a closure scheme has gained momentum as recovery notices, audits, and reassessment orders have intensified across several states, putting strain on businesses that are already navigating a complex post-pandemic economy. Many of these firms, particularly small and mid-sized enterprises, lack the bandwidth and financial resources to deal with protracted litigation or administrative scrutiny. A one-time settlement mechanism is being viewed as a pragmatic solution to clear tax department backlogs, improve taxpayer morale, and inject a sense of closure into an otherwise lingering legacy system.

Legal and tax experts supporting the proposal emphasize that a centralized framework, perhaps modeled after the central government’s past amnesty schemes like Sabka Vishwas, would ensure consistency and transparency in the closure process. They also highlight the importance of well-defined eligibility criteria, simplified application procedures, and robust grievance redressal systems to ensure equitable implementation. If adopted, such a scheme could mark a critical step in India’s efforts to transition fully from legacy tax regimes to a streamlined and predictable GST environment.