Punjab Cabinet Approves OTS Scheme for Pre-GST Arrears, Key Policy Changes Announced

Chandigarh, Sept 25: The Punjab cabinet, chaired by Chief Minister Bhagwant Mann, has cleared several major policy initiatives, including a One Time Settlement (OTS) scheme to recover pre-GST arrears, reforms in property regulation, relief for rice millers, and approval for setting up a Special NIA Court in Mohali.

OTS Scheme to Recover Pre-GST Dues

Finance Minister Harpal Singh Cheema announced that the OTS scheme will be implemented from October 1 and remain open until December 12, 2025.  One-time settlement is a debt resolution strategy where the borrower pays a part of the outstanding loan amount, and the remaining is waived by the lender . It covers taxpayers whose assessment orders were framed up to September 30, 2025, excluding government food agencies.

This scheme offered a tiered waiver structured on the amount, which is given below as follows:

• The outstanding amount is up to Rs 1 crore; the taxpayer will receive a 100% waiver on  interest and penalty ,along with a 50% waiver on the tax amount .
• For the demand between Rs 1 crore and Rs 25 Crore ,there will be 100% waiver on interest and penalties, and a 25 % waiver  on the tax amount.
• The demand exceeding Rs 25 crore, OTS provides 100% waiver on interest and penalties, with 10% waiver on the tax amount.

With around 20,039 pending cases involving dues of nearly ₹11,968.88 crore, the government expects to recover ₹3,344.50 crore if all eligible taxpayers opt in. Recovery proceedings will begin on January 1, 2026, for defaulters.

Relief for Rice Millers

The cabinet also approved an OTS policy for rice mills to settle old disputes with state procurement agencies. The move is aimed at reducing litigation, reviving sick rice units, and ensuring smooth procurement of paddy from mandis. Millers will need to clear their accounts to be considered for paddy allotments in the next cycle.

Amendments in Property and GST Laws

The government consents for the amendments of Section 5 (1), 5(3)(ii), and Section 5(8) of the Punjab Apartment and Property Regulation Act, 1995, to ensure planned development of colonies and address public grievances. Additionally, the Punjab Goods and Services Tax (Amendment Bill), 2025 has been approved by the cabinet to assist taxpayers and ensure tax compliance. Notably ,Finance Act 2025 has amended the provision of the Central  Goods and Service Tax Act, .2017 as per the recommendation of the GST  Council. A similar amendment has to be carried out in the Punjab and Service Tax Act 2017.

Special NIA Court in Mohali

To speed up sensitive trials, a Special NIA Court will be set up in Mohali, headed by a sessions judge. It will also handle cases from the Enforcement Directorate (ED), CBI, and other central agencies.

Prosecution Sanction Against Ex-Minister Dharamsot

The cabinet granted sanction to prosecute former forest minister Sadhu Singh Dharamsot in a bribery case registered by the vigilance bureau. Dharamsot is already facing multiple cases, including disproportionate assets and alleged involvement in the forest scam. ED investigations have provisionally attached properties worth ₹4.58 crore belonging to him and his family.

Conclusion

The cabinet decisions reflect the Punjab government’s focus on clearing legacy tax disputes, streamlining industrial revival, and strengthening legal mechanisms. While the OTS scheme offers final relief for businesses to settle old dues, stringent recovery actions are planned against those who miss the deadline, marking a decisive push for compliance and fiscal consolidation.