The Goa government has taken a significant step to ease the tax burden on small businesses. Chief Minister Pramod Sawant tabled the Goa Value Added Tax (Amendment) Bill, 2026, in the assembly on Tuesday. This bill aims to simplify tax compliance for small dealers.
Key Changes for Small Dealers
The bill proposes major amendments to Section 7 of the Goa VAT Act, 2005. It focuses on the composition scheme for dealers. Under the current law, small dealers must renew their option for this scheme every financial year. The new bill changes that requirement.
One-Time Option and Fixed Tax Rate
Dealers can now opt for the composition scheme just once. This option remains valid until the dealer chooses to opt out. It also stays valid unless the dealer becomes ineligible. Ineligibility can occur due to a breach of turnover limits or other conditions.
Dealers covered under Schedule E will benefit. If their turnover stays within specified limits, they can pay tax at a fixed rate on their total turnover. This replaces the regular VAT liability. The commissioner may accept this tax in full or in instalments.
Simplified Process During the Year
The bill introduces more flexibility. Dealers liable to pay tax under certain provisions can opt for composition during the year. They need to file a self-declaration. This declaration states that their turnover will not exceed the prescribed threshold.
Preventing Misuse and Ensuring Compliance
The government has included measures to prevent misuse of the composition scheme. Dealers under this scheme cannot claim input tax credit. They are also barred from charging VAT on invoices. Additionally, they cannot issue tax invoices to other dealers.
Dealers with multiple classes of business must maintain separate accounts for each category. This ensures clear and transparent record-keeping.
Clear Deadlines for Applications and Refunds
The bill sets specific deadlines to bring certainty to the tax administration process. It proposes to close the window for filing fresh applications under Section 31B. This section deals with settlement-related provisions. The last date for filing such applications is June 30, 2026.
Right of Appeal and Refund Timeframe
Another important change is the introduction of a right of appeal. Dealers can appeal before the VAT Tribunal against any order passed under Section 31B. This strengthens procedural safeguards for affected dealers.
The bill also introduces a two-year limitation period for filing VAT refund applications. Refund claims must be filed within two years from the close of the financial year to which the refund pertains. However, this limitation does not apply to refunds determined through assessment, rectification, review, or appellate orders passed within the prescribed timeframe.
Government's Intent and Impact
The Goa government states that these amendments aim to reduce the compliance burden on small traders. They also promote ease of doing business. The changes are designed to bring certainty to tax administration. They ensure time-bound resolution of claims without any financial implication for the state.
This bill was tabled during the ongoing winter session of the assembly. It reflects the government's commitment to supporting small businesses and simplifying tax processes.
