The Maharashtra State Government has notified a scheme named One Time Payment of Tax Scheme,2019. (hereinafter referred to as the ‘OTPT Scheme’) vide notification No. PFT.1218/C.R.52/Taxation-3 dated 22nd February,2019 under The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 (hereinafter referred to as the ‘Profession Tax Act’).

The OTPT scheme provides for an option for payment of Profession Tax in advance for an enrolled person under the said Act. The persons enrolled under the Profession Tax Act are granted an Enrollment Certificate by the department which is commonly known as PTE Certificate. The Schedule –I of the Profession Tax Act provides the rates of profession tax applicable to different class of persons. It may kindly be noted that the OTPT scheme is applicable only to the persons enrolled under the Profession Tax Act i.e PTE Certificate holders and not to the Employers registered under the Act i.e. PTR Certificate holders.

The OTPT Scheme replaces the earlier option of paying Profession Tax(PTE) in advance on lump-sum basis for the period of five years as per clause 8(3)(a) of the Profession Tax Act.

The OTPT scheme can be compared with the One Time Tax payable to RTO at the time of purchase of a new vehicle. The government collects the entire tax at one time and the subsequent hassles of collection, payment and administration of the same are avoided.

The details of the OTPT Scheme are explained herein below:

1. Date of Commencement of the Scheme The OTPT Scheme has come into force retrospectively with effect from 1st April,2018 and will remain effective till a further notification to end / replace / amend the scheme is issued. It as an open-ended scheme.

2. Major Conditions and Restrictions to avail benefit under the scheme:-

Clause 2 of the scheme notification, provides for conditions and restrictions to avail the scheme which are as under:-

  • The Person applying for availing the benefits under the OTPT Scheme must be enrolled i.e the person must be holding Profession Tax Enrollment Certificate.
  • The enrolled person opting for the scheme will have to apply for the same electronically through portal.
  • Such Person can avail the scheme for a minimum period of 3 years and maximum period of 35 years at his option.
  • There are no restrictions on such person to avail the benefit under the scheme again, once the earlier period of the scheme is over.
  • The Amount payable under the scheme is required to be determined as per the Table appended to the scheme.
  • Prior to this Scheme, as per clause (a) of sub-section (3) of section 8 of the Act, the enrolled person had the option to pay Profession Tax(PTE) in advance for a total continuous period of 5 years on lump-sum basis. In cases where the enrolled person has already paid such tax in advance prior to 31st March,2018, such person can opt for the OTPT scheme after completion of the period for which tax is already paid.
  • In cases where, the enrolled person has already paid Profession Tax(PTE) for the year 2018-19 or has paid any lump-sum on or after 1st April,2018 for the periods starting from 1st April 2018, can also opt to avail this scheme by making differential payment i.e difference of Amount payable as per Table & Amount paid. .
  • In case where, the person who has availed the benefit of the OTPT scheme, joins any employment during the period for which the tax payment is already discharged, then such person shall furnish to the employer ‘One Time Profession Tax Payment Certificate’ in Form A to avoid any Profession Tax deduction until completion of the period opted under the scheme.
  • If the enrolled person has paid Profession Tax under the Scheme for a particular period and subsequently such person is covered by any other entry having higher rate of tax than the rate applicable at the time of opting the scheme, then, his liability to pay tax shall not be varied due to such change in the entry in Schedule I of the Act.
  • Once the amount is paid under the Scheme, no refund of the amount paid shall be granted under any circumstances.
  • If it appears that, the person has availed the benefit of the Scheme by suppressing any material information or particulars or by furnishing any incorrect or false information or, if any suppression of material facts, concealment of any particulars is found then the benefits availed under the Scheme shall be withdrawn. Such person shall be liable to pay tax at the rate specified in Schedule I of the Act. Consequential interest liability can also arise in such cases, after adjustment of the advance paid..

3. TABLE appended to the Notification

Five different tables are provided for the five different types of rates applicable under the provisions of the Profession Tax Act. The maximum period of 35 years is only available for the enrolled persons liable to pay Profession tax of Rs.2500/- p.a. For the other tax payers te option is available minimum for 3 years and maximum 5 years.

Please click on the below link to refer the table:

Guide on One Time Payment of Tax Scheme, 2019

Overall the OTPT scheme appears to be beneficial to the tax payers as well as the Government. It is not mandatory to opt for the scheme. The tax payers can chose the period best suited to them to avail the benefit of the scheme.

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