The Karasamadhana Scheme, 2023 was announced during the Budget Speech for the year 2023-24 on 17th February 2023. This scheme is aimed at resolving pre-GST legacy tax disputes and facilitating the prompt collection of arrears without the need for litigation. It encompasses various Acts, including the Karnataka Sales Tax Act, Karnataka Value Added Tax Act, Central Sales Tax Act, Karnataka Tax on Professions, Trades, Callings and Employments Act, Karnataka Tax on Luxuries Act, Karnataka Agricultural Income Tax Act, Karnataka Entertainment Tax Act and Karnataka Tax on Entry of Goods Act.
Key Features of the Karnataka Karasamadhana Scheme, 2023:
1. Waiver of Penalty and Interest: Under the KST Act and CST Act, the scheme provides a 100% waiver of arrears of penalty and interest pertaining to assessments, re-assessments, rectifications, revisions and appeal orders that have already been completed or will be completed on or before 31st October 2023 under the KST regime.
2. Partial Waiver for KVAT Act and CST Act: For the KVAT Act and CST Act, the scheme offers a 100% waiver of arrears of penalty (except for specific cases) and interest related to assessments, re-assessments, rectifications, revisions and appeal orders that have been concluded or will be concluded by 31st October 2023.
3. Specific Waivers under KVAT Act: The scheme also grants waivers for specific penalties imposed under Section 72 (related to returns and assessments) and Section 74(4) (for not submitting the audited statement of accounts in FORM VAT 240) of the KVAT Act, subject to the condition that the admitted tax liability is paid in full.
4. Extension to Other Acts: Furthermore, the Karasamadhana Scheme, 2023 extends the waiver benefit to 100% of arrears of penalty and interest for various other Acts, namely the Karnataka Tax on Entry of Goods Act, Karnataka Tax on Professions, Trades, Callings and Employments Act, Karnataka Tax on Luxuries Act, Karnataka Agricultural Income Tax Act and Karnataka Entertainment Tax Act, for assessments concluded or to be concluded by 31st October 2023.
5. Waiver for Revision Orders: The scheme provides a 100% waiver of arrears of interest and penalty (except for specific cases) for revision orders that have already been concluded or initiated before the date of issuance of the government order and are to be completed by 31st October 2023 under all the Acts mentioned in the preamble.
Conditions for Availing the Scheme:
To benefit from the Karnataka Karasamadhana Scheme, 2023, certain conditions must be met:
1. Timely Payment: Any dealer, person or proprietor must make full payment of arrears of tax on or before 31st December 2023 to avail a 100% waiver of arrears of penalty and interest.
2. Arrears of Penalty and Interest: If a dealer has no arrears of tax but has arrears of penalty and interest only, pertaining to assessments, re-assessments, rectifications, revisions and appeal orders completed or to be completed by 31st October 2023, those arrears will be eligible for waiver.
3. Withdrawal of Appeals/Applications: If a dealer has filed an appeal or any application against the order or proceedings related to arrears of tax, penalty and interest before any Appellate Authority or Court, they must withdraw such appeal or application before seeking the benefits of the waiver scheme.
4. Disallowance of New Appeals/Applications: Dealers are not allowed to file new appeals or applications before any Appellate Authority or Court after applying for or availing the benefits of this scheme.
5. Exclusion of Certain Cases: The scheme does not apply to cases where the State has filed appeals before the Karnataka Appellate Tribunal or the Central Sales Tax Appellate Authority or before the High Court or Supreme Court or where competent authorities have initiated revision proceedings before 31st October 2023 or where any rectification is made after this date.
Procedure for Availing the Scheme:
The procedure for availing the benefits of the Karasamadhana Scheme, 2023 is as follows:
1. Submission of Applications: Dealers, persons or proprietors opting for this scheme must submit separate applications in the prescribed format under the respective Acts for each assessment year electronically through specified websites. The last date for application submission is 31st December 2023.
2. Scrutiny and Discrepancies: The concerned Assessing Authority, Recovery Officer or Prescribed Authority will scrutinize the applications and verify the arrears of tax, penalty and interest up to the date of filing. Any discrepancies found will be communicated to the applicant within 15 days from the application submission date.
3. Payment: If discrepancies are reported, the applicant has the option to make the balance payment within 15 days from the date of receiving the information or on or before 15th January 2024, whichever is earlier.
4. Withdrawal of Appeals/Applications: Applicants must file a declaration supporting the withdrawal of appeals or applications along with their request for the waiver of arrears of penalty and interest.
5. Order of Waiver: Upon satisfaction that the applicant is eligible for the scheme’s benefits, the Assessing Authority, Recovery Officer or Prescribed Authority will pass an order waiving the balance amount of arrears of penalty and interest payable by the applicant under the relevant Act for each assessment year or order.
Special Provisions of the Scheme:
The Karnataka Karasamadhana Scheme, 2023 also includes specific provisions:
1. Unregistered Dealers: Assessments, re-assessments, rectifications or other proceedings related to unregistered dealers are eligible for the scheme, provided certain conditions are met. The number “2900” shall be used in applicable Annexures in case of the absence of RC Number or Tax Payer’s Identification Number (TIN) or Enrolment Number.
2. Remanded Cases: Assessments, re-assessments, rectifications or other proceedings passed due to remanding by First Appellate Authority, Karnataka Appellate Tribunal, Revisional Authority, High Court or Supreme Court are eligible for the benefits of the scheme.
Conclusion:
The Karnataka Karasamadhana Scheme, 2023 presents an opportunity for taxpayers to resolve pre-GST legacy tax disputes and settle arrears without the burden of litigation. By adhering to the prescribed conditions and procedures, taxpayers can avail themselves of the scheme’s waivers of penalties and interest under various Acts, ultimately facilitating smoother tax compliance and collection.
https://gst.kar.nic.in/latestupdates/karasamadhana202319723.pdf