Kerala Amnesty Scheme 2024: Settle Your Tax Arrears Before December 31, 2024 [Read Circular]

Introduction 

In an effort to resolve long-standing tax arrears and provide relief to taxpayers, the Kerala State Goods and Services Tax (SGST) Department introduced the Amnesty Scheme 2024. This initiative, launched on August 1, 2024, presents an excellent opportunity for taxpayers to settle arrears of tax, surcharge, interest and penalties, with substantial waivers available. The scheme extends to assessment years up to 2017-2018 and is designed to simplify the settlement process, allowing taxpayers to clear dues at significantly reduced rates. With the deadline set for December 31, 2024, time is running out for eligible applicants to take full advantage of the program.

Overview of the Amnesty Scheme 

The Amnesty Scheme 2024 is part of the Kerala government’s effort to reduce the backlog of tax arrears while encouraging compliance and simplifying the process for settling dues. With the scheme now in effect, it is applicable to arrears from multiple tax regimes that predate the implementation of GST in 2017, providing relief to a broad spectrum of taxpayers across industries and sectors.

Scope and Applicability 

The scheme is available for arrears accrued under various tax statutes, including:

• Kerala Surcharge on Taxes Act, 1957 
• Kerala General Sales Tax Act, 1963 
• Kerala Tax on Luxuries Act, 1976 (repealed) 
• Kerala Agricultural Income Tax Act, 1991 (repealed) 
• Kerala Value Added Tax Act, 2003 (repealed) 
• Central Sales Tax Act, 1956 

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This broad coverage means that any individual or entity with outstanding dues under these Acts can benefit, as long as the dues are from assessment years up to 2017-2018. One notable exception is that arrears related to the sale of foreign liquor are excluded from the scheme.

Eligibility Criteria 

To qualify for the Amnesty Scheme 2024, applicants must meet the following conditions: 

1. Arrears Payable: The scheme applies to those with arrears of tax, surcharge, interest or penalties under the aforementioned Acts. 
2. Assessment Period: The arrears should be from assessment years up to 2017-2018. 
3. Exclusions: Arrears related to foreign liquor sales are not eligible for the scheme. 
4. Pending Collection: The arrear amount must be pending as of the date of application.

Key Features of the Amnesty Scheme

Substantial Waivers on Dues:

The scheme offers waivers based on the tax arrear amount, structured into four main categories:

• Up to Rs.50,000: Full waiver on tax, surcharge, interest and penalties.
• Rs.50,000 to Rs.10,00,000: 70% waiver, with 30% of the tax or surcharge payable.
• Rs.10,00,000 to Rs.1,00,00,000: 60% waiver, with 40% payable.
• Above Rs.1,00,00,000: 30% waiver, with 70% payable.

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This sliding scale provides a clear path for both small and large taxpayers to settle their dues efficiently, ensuring that those with higher arrears can still access considerable financial relief.

Simplified Application Process:

The SGST Department has ensured a straightforward application process, which is predominantly conducted online. Here’s a step-by-step guide on how to apply for the scheme:

1. Submit Separate Applications: Each “specified order” must have its own application.
2. File Online: All applications must be submitted through the online portal.
3. Required Documents: Applicants must attach the specified order, payment proofs from the e-treasury portal and any demand notice related to the arrears.
4. Alternative Documentation: If the specified order is unavailable, applicants may provide certified copies of statutory registers or arrear pendency intimations.
5. Pending Appeals: In cases where appeals, revisions or reviews are pending, applicants must submit proof of withdrawal, i.e., leave to withdraw from the relevant court or authority.

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This clear and structured application process helps avoid delays and provides a convenient, paperless solution for taxpayers.

Strict Time Limits: 

To ensure taxpayers take timely advantage of the Amnesty Scheme 2024, there are defined deadlines:

• Application Submission: Applications must be filed within 60 days of the scheme’s commencement to avail full benefits. The scheme’s window officially closes on December 31, 2024.
• Payment Deadlines: Payments must be completed by March 31, 2025. However, for modification pending cases, taxpayers have an additional 120 days from the issuance of the modified order to make payments.

Taxpayers who meet these timeframes stand to gain maximum benefits from the scheme, including full or partial waivers.

Automatic Settlement for Small Dues:

Taxpayers with arrears of Rs.50,000 or less will automatically have their dues settled. In these cases, no manual application is required, and the SGST Department will issue a certificate of settlement suo motu. This provision is particularly advantageous for small taxpayers who may have accrued minor arrears but face disproportionate penalties or interest.

Appeals and Dispute Resolution: 

If taxpayers disagree with any decisions or orders under the Amnesty Scheme 2024, they can file an appeal within 30 days of the order’s communication. The appeal process itself is designed to be quick and efficient, with acknowledgements issued within 15 days and final resolutions within 90 days.

This provision ensures that taxpayers have an avenue for recourse should any disputes arise regarding their applications.

Special Provisions and Considerations 

Several other provisions are embedded in the scheme to make it flexible and accessible for a wide range of taxpayers:

• Modification Pending Cases: Applications can be filed without payment for cases where modifications are pending. Applicants are given 60 days after receiving the modified order to make the necessary payments.
• Pre-Deposit Adjustments: The scheme allows for pre-deposit adjustments in cases where taxpayers have already made partial payments. This ensures that previous payments are considered when determining final arrears.
• Revocation and Rectification: If a certificate of settlement is issued erroneously or in bad faith, the SGST Department reserves the right to revoke or rectify it, provided the taxpayer is given an opportunity to be heard.

Illustrations and Real-World Scenarios 

The circular accompanying the Amnesty Scheme 2024 provides detailed illustrations to help applicants understand various scenarios, such as pre-deposit adjustments, appeal withdrawals and the treatment of cases with pending appeals or modified orders, offering clarity on how the scheme applies in real-world scenarios. These help taxpayers understand how their dues and waivers will be calculated in various circumstances.

Conclusion: Act Before it’s too late 

The Kerala Amnesty Scheme 2024 represents a golden opportunity for taxpayers to settle their arrears efficiently and with substantial financial relief. By providing varying waiver percentages and a simplified application process, the scheme aims to clear longstanding dues and encourage compliance. However, with the application deadline set for December 31, 2024, taxpayers must act quickly to take full advantage of the scheme.

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For those seeking to settle their tax arrears once and for all, this scheme offers an accessible and highly beneficial route. The taxpayers can apply now and ensure that they meet all deadlines to avoid future complications or penalties.

By understanding the key features of the Kerala Amnesty Scheme 2024, taxpayers can navigate the process smoothly, settle their dues and achieve financial peace of mind making the most of this time-sensitive opportunity before the window closes.

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