Karnataka Govt. has notified the ‘Karasamadhana Scheme, 2021’ (“Scheme”) to complete the pre-GST legacy audit and clear tax arrears. The Scheme grants 100% waiver of arrears of penalty and interest payable by a dealer under the Karnataka Sales Tax Act, 1957 (“KST Act”) Central Sales Tax Act, 1956 (“CST Act”) and Karnataka Value Added Tax Act, 2003 (“KVAT Act”) etc. relating to the assessments/ re-assessments/ rectification orders already completed and to be completed on or before July 31, 2021. Salient features of the Scheme are as below:
- The Scheme includes the procedure, eligibility and conditions for waiver of arrears of penalty and interest.
- The Scheme grants waiver of penalty levied 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 for failure to submit a copy of the audited statement of accounts under the KVAT Act and consequential interest subject to the condition that admitted tax liability, if any, is paid in full and penalty levied by the Audit Officer for failure to submit a copy of the audited statement of accounts.
- On completion of the assessment process a dealer has to pay arrears in tax to the government. Any dealer or person or proprietor, who makes full payment of arrears of tax on or before October 31, 2021 shall be granted a waiver of 100% of arrears of penalty and interest payable. However, any penalty levied by the Registering Authority under the CST Act shall not be eligible for the benefit of waiver under this Scheme.
- Any discrepancies in the declaration made by the dealer will be addressed by November 15, 2021 after which penalties and interest on the tax will be waived. Dealers who have no arrears of tax but only arrears of penalty and interest will also receive benefits under the Scheme.
- If any case or appeal is filed by a dealer in courts regarding payment of taxes or penalties should be withdrawn to avail benefits under the Scheme.
The full Scheme can be accessed at: https://gst.kar.nic.in/Othertaxlaws/ComprehensiveKarasamadhanaScheme2021.pdf