The Karnataka Karasamadhana Scheme aims to speed up pre-GST arrears collection without litigation. By paying tax arrears in full before December 31, 2023, participants receive 100% forgiveness of penalties and interest. It encourages timely settlement, eases the legal system’s burden, and promotes fiscal compliance in Karnataka.
Karnataka Karasamadhana Scheme 2023
The Karnataka Karasamadhana Scheme 2023, introduced through Order No. FD 07 CSL 2023 on July 18, 2023, aims to expedite the recovery of pre-GST tax arrears and address tax issues without resorting to court proceedings. Those who pay their tax arrears in full by December 31, 2023, receive a 100% waiver of penalties and interest. Cases with completed assessments, reassessments, rectifications, or appeals by October 31, 2023, but with arrears of penalties and interest, are also eligible for the waiver.
If information is received from the authorities, the remaining tax must be paid within 15 days of receipt or by January 15, 2024, whichever is earlier, to avail the scheme’s benefits. However, failure to pay the entire amount by the specified date disqualifies applicants from the scheme. The initiative encourages taxpayers to clear their dues promptly and avoid lengthy legal disputes, promoting efficient resolution of tax matters and quick arrears collection. The government has made the application process simple for dealers wishing to participate in the scheme.
Karnataka Karasamadhana Scheme Details in Highlights
| Name | Karnataka Karasamadhana Scheme | |
| Launched by | Government of Karnataka |
| State | Karnataka |
| Official Website | vat.kar.nic.in |
Karnataka Karasamadhana Scheme Objective
The objective of the Karnataka Karasamadhana Scheme is to address the challenges arising from the increasing use of the internet for economic activities, especially during the COVID-19 pandemic. As more services and transactions move online, there has been a rise in internet trading, but some individuals and corporations misuse this convenience and fail to fulfill their tax and interest obligations on time. This non-compliance negatively impacts India’s economy.
To tackle this issue, the Karnataka government has implemented the Karasamadhana Scheme. The primary goal is to efficiently resolve legacy tax disputes that existed before the implementation of the Goods and Services Tax (GST) and streamline the process of collecting back taxes. By offering incentives such as 100% waiver of penalties and interest to those who pay their tax arrears in full by a specified deadline, the government aims to encourage taxpayers to come forward and clear their dues promptly. This scheme is designed to avoid lengthy litigation processes and ensure swift recovery of tax arrears, ultimately contributing to the economic growth and fiscal stability of Karnataka.
Features of Karnataka Karasamadhana Scheme
The Karnataka Karasamadhana Scheme incorporates several key features to encourage the resolution of tax disputes and expedite the collection of back taxes:
- The scheme grants a 100% waiver of arrears of penalty and interest for assessments, reassessments, rectifications, revisions, and appeal orders that have been completed or will be completed on or before October 31, 2023, under the Karnataka Sales Tax (KST) regime, as well as the KST Act and Central Sales Tax (CST) Act.
- Assessments, reassessments, rectifications, revisions, and appeal orders under the Karnataka Value Added Tax (KVAT) Act and CST Act that have been resolved or will be resolved by October 31, 2023, (with some exceptions) are eligible for a 100% forgiveness of penalty and interest arrears.
- For revision orders that were completed or initiated before the date of the government order and are required to be finalized by October 31, 2023, under all the Acts mentioned in the scheme, there is a 100% waiver of arrears of interest and penalty (with certain exceptions).
- Penalties under Sections 72 (related to returns and assessments) and 74(4) (related to failure to submit the audited statement of accounts in FORM VAT 240) of the KVAT Act can be remitted under the scheme if the confessed tax due is fully paid.
- Overall, the Karnataka Karasamadhana Scheme is designed to provide significant incentives for taxpayers to clear their tax arrears promptly and foster a more efficient resolution of pre-GST tax disputes without resorting to prolonged litigation processes.
Benefits of Karnataka Karasamadhana Scheme
The key benefits of the Karnataka Karasamadhana Scheme are
- 100% Waiver of Penalties and Interest for timely tax arrears payment.
- Swift resolution of pre-GST tax disputes without litigation.
- Encouraging fiscal compliance among taxpayers.
Eligibility Criteria
The eligibility criteria for the Karnataka Karasamadhana Scheme are as follows:
- Individuals or entities falling under Section 10A of the Goods and Services Tax (GST) Act are not eligible for the scheme. Section 10A likely refers to certain specified categories or special provisions under the GST Act.
- Applicants must print and keep a record of the payment transaction after completing the payment process to serve as evidence of payment.
- The applicant’s payment status must be in compliance with the scheme’s requirements, meaning that they need to pay the full tax arrears as specified by the scheme to avail its benefits.
- The printed copy of the payment transaction must be submitted to the tax department, likely as a part of the application process to avail the benefits of the Karnataka Karasamadhana Scheme.
- It’s important to refer to official government sources or the scheme’s official documentation for comprehensive and up-to-date information regarding the eligibility criteria.
Required Documents
- Applicant’s Aadhar Card
- Applicant’s PAN Card
- Business Card
- Residential Certificate
- Mobile Number
- Email ID
Steps to Apply For Karnataka Karasamadhana Scheme
- To apply for the Karnataka Karasamadhana Scheme, follow these steps:
- Dealers, individuals, or proprietors must electronically submit a separate application for each assessment year using the required format as per the applicable Acts. The application deadline is December 31, 2023.
- The Assessing Authority, Recovery Officer, or Prescribed Authority will review the applications and check the tax, penalty, and interest amount owed. If any discrepancies are found, the applicant will be informed within 15 days of application submission.
- If discrepancies are identified, the applicant can choose to pay the remaining amount within 15 days of receiving the information, on or before January 15, 2024, or both, whichever comes first.
- Applicants must provide a declaration indicating the withdrawal of any pending appeals or applications when seeking the waiver of penalty and interest arrears.
- Once satisfied that the applicant is eligible for the scheme’s benefits, the Assessing Authority, Recovery Officer, or Prescribed Authority will issue an order waiving the remaining arrears of penalty and interest payable for each assessment year or order.
- It’s essential to adhere to the specified deadlines and procedures to ensure successful application and availment of the benefits under the Karnataka Karasamadhana Scheme. For detailed and up-to-date information, refer to official government sources or scheme-related documentation.