Due to lockdown pandemic, Kerala Government has launched the Amnesty Scheme 2020 in order to settle pre-GST Tax Arrears. The Government has launched this scheme to settle outstanding tax dues about the period before the introduction of the Goods and Services Tax so that taxpayers can clear their arrears. This scheme provide mutual benefit both to the taxpayer and the revenue to clear all dues which were not settled in the earlier announced amnesty scheme. The amnesty scheme shall apply to the outstanding dues under the Kerala Value Added Tax Act, Central Sales Tax Act, Tax on Luxuries Act, Kerala Surcharges Act, Kerala Agriculture Income Tax Act and Kerala General Sales Tax Act.
The arrears for settlement under this scheme shall be calculated as on the date of submission of option. The assesses who opt this amnesty scheme shall settle all the outstanding dues as on the date of option together. The assessee has no right for a partial option based on any particular assessment period only. All amounts paid by the assessee after issuance of demand notice shall be given credit to the principal amount. The assessees who have opted for amnesty schemes earlier, but could not settle the arrears, can also opt under this scheme.
Amounts paid during the earlier schemes will be given credit under tax as per this scheme. Outstanding interest and penalty as on the date of the option shall be waived. After giving credit for the payments made before this scheme (tax/interest/amount paid under amnesty) towards the principal amount, the balance outstanding against the principal amount for which Amnesty 2020 is applicable will be reckoned.
In the case of arrears under the Kerala General Sales Tax Act, the amnesty scheme is applicable only for the outstanding dues before the period 1st April, 2005. But in the case of arrears from 01.04.2005 to 31.03.2020 principal amount and interest shall be paid. There will be full waiver of the penalty. Any amount paid towards penalty or it’s interest shall not be given credit. In the case of penalty levied is not utilized or not liable to be utilized for any best judgment assessment, the demand can be settled under this amnesty scheme on payment of applicable tax relating to the penalty.
In the case of arrears under the revenue recovery process, if the assessee opts this amnesty scheme and settle the outstanding dues, the assessing authority shall withdraw the revenue recovery proceedings. In such cases the assessee is not liable for payment of any collection charges. It is to be remembered that revenue recovery proceedings against the assessee shall be withdrawn only after full payment of the amount due under this amnesty scheme. In the case of assessees who opt this scheme and payments made through installments, till final payment is made, the revenue recovery process may be kept in abeyance in “RR ONLINE” portal.
Since the amnesty scheme provides for outright settlement of arrears, the assessee who opts for the scheme shall withdraw all the cases pending before any appellate or revisional authority, tribunal or courts unconditionally and shall file a declaration to this effect through online. In the case of appeals filed by the State which is pending for final orders as on the date of option, this scheme can be opted based on the demand in the original assessment order. Once the outstanding dues are settled under this scheme, there shall be no refund or adjustment subsequently for the amount settled under this scheme.
Key highlights of the amnesty Scheme are:
• 100% waiver of interest and penalties.
• 60% waiver of the balance tax arrear, if outstanding dues paid in lump sum.
• 50% waiver of the balance tax arrear, if outstanding dues paid in installments.
• Amnesty scheme will be applicable for all pending tax arrears including cases in appeals (Except arrears under KGST from 2005 onwards).
• Option to avail the amnesty scheme should be made on or before 31 July 2020.
• The last date for payment of the amount determined under the scheme shall be 31.12.2020.
• Tax or interest paid after receipt of demand notice shall be given due credit towards tax.
• Taxpayers who have failed to settle arrears under the previous amnesty scheme can also opt for this scheme.
• Any amount paid under the earlier amnesty scheme shall be given due credit.
• Those who have compounded offences and paid tax in such proceedings, such tax will be given credit.
• No refund shall be allowed under the scheme.