The Karnataka Government notified the Karasamadhana Scheme, 2021 to complete the pre-GST legacy audit and clear tax arrears expeditiously.
The scheme grants 100% waiver of arrears of penalty and interest payable by a dealer under the Karnataka Sales Tax Act, 1957 and Central Sales Tax Act, 1956 relating to the assessments / re-assessments/ rectification orders already completed and as the case may be, to be completed on or before July 31, 2021, under the KST regime.
It further grants a waiver of 100% of arrears of penalty and interest payable by a dealer under the Karnataka Value Added Tax Act, 2003 and CST Act relating to the assessments/ re-assessments/ rectification orders already completed and to be completed on or before July 31, 2021.
The Scheme grants waiver of penalty levied under Section 72(1)(a) or 72(1)(b) for failure to furnish return under the KVAT Act and consequential interest subject to the condition that admitted tax as per the return is paid in full, penalty levied under Section 74(4) for failure to submit a copy of the audited statement of accounts in FORM VAT 240 under the KVAT Act and consequential interest subject to the condition that admitted tax liability, if any, as per FORM VAT 240 is paid in full and penalty levied by the Audit Officer under Section 72(3-B) for failure to submit a copy of the audited statement of accounts.
The grant of waiver of penalty and interest is subject to the various conditions.
Firstly, any dealer or person or proprietor as the case may be, who makes full payment of arrears of tax on or before 31.10.2021 shall be granted a waiver of 100% of arrears of penalty and interest payable. However, any penalty levied by the Registering Authority under section 10-A of the CST Act shall not be eligible for the benefit of waiver under this Scheme.
Secondly, where the dealer has no arrears of tax but has arrears of penalty and interest only, relating to the assessments or re-assessments already completed and to be completed, as the case may be, on or before July 31, 2021, such arrears of penalty and interest shall be eligible for a waiver.
Thirdly, where a dealer has filed an appeal or any application against the order or proceedings relating to arrears of tax and arrears of penalty and interest before any Appellate Authority or Court and disposal of such application is still pending, the dealer shall withdraw such appeal or other application before availing the benefit of waiver of arrears of penalty and interest under this Scheme. The dealer shall file a declaration in support of the withdrawal of appeal or other application along with the application for waiver of arrears of penalty and interest. Such application and declaration shall be filed for each year separately.
Fourthly, After the appeal or other application is withdrawn, the amount of arrears of penalty and interest shall be considered for a waiver under the Scheme. Any amount of penalty and interest paid at the time of filing an appeal or other application shall be eligible for adjustment towards arrears of tax outstanding for the assessment year for which the benefit of waiver is claimed. However, the dealer shall not be eligible for a refund of any amount that may become excess as a result of such adjustment under this Scheme.
Fifthly, in respect of cases where any Appeal or other application is not filed, the dealer shall not be eligible for refund of any penalty or interest already paid, either in full or partially, under this Scheme.
Sixthly, the dealer shall not file an appeal or other application before any Appellate Authority or Court or shall not seek rectification of orders/proceedings, after filing application for availing the benefits of this Scheme or after availing the benefits of this Scheme, for whatever reasons.
Lastly, the dealer shall not be eligible to avail the benefits of this Scheme in relation to an order giving rise to arrears of tax, penalty and interest where State has filed an appeal before the Karnataka Appellate Tribunal or the Central Sales Tax Appellate Authority; or State has filed an appeal or revision or any kind of application before the High Court or the Supreme Court; or any competent authority has initiated suomotu revision proceedings as on the date of this Government Order; or any rectification is made after July 31, 2021.
“In respect of assessments/ re-assessments/ rectification orders passed in the case of unregistered dealers/ persons under any of the acts mentioned in the preamble are eligible to avail the benefits under this scheme subject to fulfillment of conditions specified therein. In the absence of RC Number or Tax Payer’s Identification Number (TIN) or Enrolment Number, as the case may be, the four-digit number 2900 shall be entered in the applicable Annexure so as to consider the case for waiver of penalty and interest under the relevant act,” the Government notified.
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