The Uttar Pradesh state cabinet on Wednesday approved a 'one-time settlement scheme' for the recovery of dues from owners of light commercial vehicles. Under this scheme, owners will receive an additional rebate of 35% on old tax dues for transport vehicles, along with a complete 100% waiver on penalties. The proposed scheme will remain valid for only two months from the date of issuance of the official notification.
Background of the Scheme
A notification issued on January 30, 2026, introduced a one-time tax system for light commercial vehicles with a gross weight of up to 7.5 tons. Currently, there are over 29 lakh such vehicles registered in Uttar Pradesh. Among them, more than 8.5 lakh vehicles have outstanding tax dues amounting to a total of Rs 1,852.96 crore.
Previous Settlement Schemes
The state government had previously introduced one-time penalty settlement schemes in 2022-23 and 2024-25 for various categories of commercial vehicles. However, those schemes only provided waivers on penalties and did not address the principal tax dues. The amount recovered under those 'one-time penalty' settlement schemes has been extremely low, according to the state government.
The new scheme aims to improve recovery rates by offering significant relief on both tax and penalty components. Vehicle owners are encouraged to take advantage of this limited-time offer to clear their outstanding dues without facing additional financial burden.
