Punjab extends OTS Scheme, big relief for traders and industry
Babushahi Bureau
Chandigarh, January 1, 2026: In a significant relief to traders and industry, the Punjab Government, under the leadership of Chief Minister Bhagwant Singh Mann has extended the deadline for the Punjab One-Time Settlement (OTS) Scheme for Recovery of Outstanding Dues, 2025 till March 31, 2026. The move reinforces the state government’s commitment to trader-friendly and pro-business governance.
Punjab Finance, Planning, Excise and Taxation Minister Harpal Singh Cheema approved the extension following strong representations from industry stakeholders, including the GST Practitioners Association (GSTPA), Punjab. The decision comes amid an encouraging response to the scheme, with 6,348 applications already received.
The government acknowledged that taxpayers faced significant compliance pressure during the final months of 2025 due to overlapping statutory deadlines. Additionally, delays in the service of VAT assessment orders made it difficult for several eligible businesses to accurately assess their outstanding liabilities within the earlier timeframe.
Launched on October 1, the OTS Scheme-2025 has emerged as one of Punjab’s most taxpayer-friendly initiatives, aimed at resolving long-pending disputes from the pre-GST era while unlocking blocked revenue for the state.
Under the scheme, eligible taxpayers can avail up to 100 percent waiver on interest and penalties, along with substantial relief on the principal tax amount, depending on the demand.
Finance Minister Harpal Singh Cheema said the extension would provide a crucial opportunity for genuine taxpayers to settle legacy disputes under pre-GST laws, including VAT and Central Sales Tax, without procedural stress.
“Our government is committed to easing compliance and fostering a supportive environment for trade and industry. By extending the OTS deadline till March 31, 2026, we are ensuring that no genuine taxpayer is left out due to administrative or timing constraints,” Cheema said.
He urged all eligible businesses and rice millers to utilise this extended window to clear their arrears and begin the new financial year on a clean slate. The Minister cautioned that strict recovery proceedings would be initiated against defaulters who fail to opt for the settlement after the revised deadline.