Comprehensive Karasamadhana Scheme

Karnataka State Government has approved the Comprehensive Karasamadhana Scheme in order to reduce the arrears arising out of the enactments that are administered by the Commercial Taxes Department. With the establishment of this Act, a scheme for waiver of penalty and interest under the provisions of the following Acts have been formulated.

• The Karnataka Sales Tax Act, 1957
• The Karnataka Value Added Tax Act, 2003
• The Central Sales Tax Act, 1956
• The Karnataka Tax on Professionals, Trades, Callings and  Employments Act, 1976
• The Karnataka Tax on Luxuries Act, 1979
• The KarnatakaAgricultural Income Tax Act, 1957
• The Karnataka Entertainment Tac Act, 1958

Benefits of the Scheme

The scheme is relevant for companies having arrears of penalty and interest as per the Karnataka State taxes. It provides a waiver of arrears of penalty and interest payable by a dealer under various state laws by fulfilling certain conditions. The procedures and form to avail the benefits of the scheme are also mentioned in the order.

Features of the Scheme

The salient features of the Comprehensive Karasamadhana Scheme are given below:

• It grants a waiver of 100% of arrears of penalty and interest that is payable by a dealer as per the Karnataka Sales Tax Act, 1957 and Central Sales Tax Act, 1956 pertaining to the assessment/ re-assessment years up to 31.03.2005 that would be completed on or before 30th June 2019 as per the rules of KST management.
• It grants a waiver of 100% of arrears of penalty and interest that is payable as per the Karnataka Value Added Tax Act, 2003 and CST Act about the assessments/ re-assessments that have to be completed on or before 30th June 2019.
• It grants a waiver of
  • Penalty charged under Section 75(1)(a) or 72(1)(b) for failure to furnish a return, as specified in the KVAT Act and consequential interest, on the condition that admitted tax as per the return is completely paid
  • Penalty charges under Section 74(4) for failure to submit a copy of the audited statement of accounts in FORM VAT 240 as mentioned in the KVAT Act and consequential interest subject to the condition that declares tax liability. In case of any tax liability, it has to be paid in full, as per the guidelines mentioned in FORM VAT 240.
• It grants a waiver of 100% of arrears of penalty and interest that is payable by the dealer or a person or proprietor, pertaining to the assessment or reassessment that would be concluded up to 30th June 2019, under the following Acts.

1. Karnataka Tax on Entry of Goods Act, 1979
2. Karnataka Tax on Professionals, Trades, Callings and Employments Act, 1976
3. Karnataka Tax on Luxuries Act, 1979
4. Karnataka Agricultural Income Tax Act, 1957
5. Karnataka Entertainments Tax Act, 1958

Conditions

The granting of a waiver of penalty and interest is subject to the following conditions.

• Any dealer, person or proprietor making a full payment of arrears of tax on or before 30.09.2019, will be granted a waiver of 100% of arrears of penalty and interest payable. However, any penalty that is charged by the Registering Authority as mentioned in Section 10A of the CST Act shall not be eligible for the benefit of waiver under the scheme.
• If the dealer has no arrears of tax but has arrears of penalty and interest relating to the assessments or re-assessments that are already completed and those that are yet to be completed are made on or before 30th June 2019, and such arrears of penalty and interest is eligible for a waiver.
• If a dealer has filed an appeal or any application against the order or proceedings pertaining to the tax and arrears of penalty and interest before an Appellate Authority/ Court and disposal of such application is pending, the dealer would not withdraw such appeal or other application before getting the benefit of waiver of arrears of penalty and interest of this scheme. The dealer has to file a declaration in support of the withdrawal of appeal or other application in Annexure -II with the application for waiver of arrears of penalty and interest in Annexure-I appended to this order. Such application and declaration have to be filed every year separately.
• After the appeal or other application is withdrawn, the amount of arrears of penalty and interest would be considered for waiver under the scheme. Any amount of penalty and interest that is paid while filing an appeal or other application will be eligible for adjustment towards arrears of tax outstanding for the assessment year for which the benefit of the waiver is claimed. However, the dealer would not be eligible for a refund of any amount that becomes excess as a result of such adjustment of the scheme.
• If an appeal or other application is not filed, the dealer remains ineligible for a refund of any penalty or interest that is paid under the scheme.
• The dealer should not file an appeal or other application before any Appellate Authority or Court or shall not seek rectification of orders/ proceedings, after applying to avail the benefits of the scheme or after availing the benefits of the scheme.
• The dealer is not eligible to avail the benefits of this scheme to an order giving rise to arrears of tax, penalty and interest, if:
  • The State has filed an appeal before the Karnataka Appellate Tribunal or the Central Sales Tax Appellate Authority.
  • The State has filed an appeal or revision or any application before the High Court or the Supreme Court.
  • Any competent authority has initiated suo moto revision proceedings as on the date of this Government Order.
  • Any rectification made after 30-06-2019.