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Karnataka Comprehensive Karasamadhana Scheme, 2019: Arrears of penalty and interest under State taxes

Karnataka State government, vide Order NO. FD 9 CSL 2019 dated February 21, 2019 has approved Comprehensive Karasamadhana Scheme, 2019 with a view to reduce the arrears arising out of the enactments administered by the Commercial Taxes Department which existed before the introduction of Goods and Services Tax (GST) Act.

The scheme will be relevant for companies who may be having arrears of penalty and interest under Karnataka State taxes. The Scheme provides for 100% waiver of arrears of penalty and interest payable by a dealer under various state laws upon fulfillment of certain conditions. The procedures and form for availing the benefit have also been prescribed in the Order.

The scheme provides:

a) 100%  waiver of arrears of penalty and interest payable by dealer under Karnataka Sales tax Act, 1957 (‘KST Act’), Karnataka Value added tax act, 2003 (‘KVAT Act’) and Central sales tax act, 1956 (‘CST Act’), relating to assessment/re-assessment (up to March 31, 2005 for KST Act) already completed and to be completed on or before June 30, 2019

b) 100% waiver of arrears of penalty and interest payable by dealer or person or proprietor relating to assessment/re-assessment already completed and to be completed on or before June 30, 2019 under the following Acts:

  1. Karnataka tax on Entry of Goods Act, 1979 (‘KTEG Act’)
  2. Karnataka tax on Professions, Traders, Calling and Employment Act, 1976 (‘KTPTC&E Act’)
  3. Karnataka tax on Luxuries Act, 1979 (‘KTL Act’)
  4. Karnataka Agricultural Income Tax Act, 1957 (‘KAIT Act’)
  5. Karnataka Entertainment Tax Act, 1958 (‘KET Act’)

c) Waiver of penalty under following:

  1. Penalty levied u/s 72(1)(a) or 72(1)(b) for failure to furnish return under the KVAT Act and consequential interest subject to the condition that the tax admitted as per returns is paid in full.
  2. Penalty levied under section 74(4) for failure to submit audited financial statement of accounts in form VAT 240 under KVAT Act and consequential interest subject to the condition that the tax liability admitted as per form VAT 240 is paid in full.

The Order also specifies the conditions to be satisfied and procedure to be followed for claiming the benefit.

Copy of the Order is also attached for your reference.


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