Kerala’s Finance Minister K N Balagoapal unveiled the much-anticipated state Budget for the year 2024 on February 5, 2024. The budget has proposed an Amnesty scheme named ‘Amnesty 2024’ Tax Arrears Resolution Scheme for the Pre-Goods and Services Tax ( GST ) business tax arrears. The last date to apply for the resolution scheme is 31st December 2024.
The Minister added that “benefits under the Amnesty 2024 Scheme shall be available only to those who join before a specified date, and any delay in joining the scheme will reduce the available benefits.”
Owed under pre-GST tax laws, the government is seeking to resolve approximately 14,000 crores in arrears, with many being either outdated or of nominal amounts. Since the cessation of the old tax laws about 6 and a half years ago and the widespread transition to the GST system by most businesses. The initiative aims to revitalise the trade sector in Kerala, particularly the small-scale segment, responding to numerous requests received during the Nava Kerala Sadas.
The features of ‘Amnesty 2024’ Scheme are as follows:
- This scheme will apply to arrears under the Kerala Value Added Tax Act, Kerala Agricultural Income Tax Act, Kerala General Sales Tax Act, Kerala Tax on Luxuries Act, and Kerala Surcharge on Taxes Act.
- This scheme will not be applicable for arrears related to turnover tax and tax payable at compounded rates under the Kerala General Sales Tax Act by dealers including Bar Hotels and distilleries.
- Tax arrears related to business transactions conducted before the implementation of the GST law will be covered under this scheme.
- This scheme will fully waive off penalties and interest on the arrears.
- Under this scheme, arrears are divided into four slabs based on the tax amount involved:
- In the first slab, arrears with tax amounts up to fifty thousand rupees will be completely waived off. Though this slab accounts for less than one percent of the total arrear amount, it will help resolve approximately twenty-two thousand cases, providing a new impetus to the small-scale trade sector.
- In the second slab, for arrears with tax amounts from fifty thousand to ten lakh rupees, 30% of the tax amount needs to be paid.
- In the third slab, for arrears with tax amounts from ten lakhs to one crore rupees, there are two approaches.
- For arrears under appeal (involved in legal proceedings) in this slab, 40% of the tax amount needs to be paid.
- For arrears not under appeal (not involved in legal proceedings) in this slab, 50% of the tax amount needs to be paid.
- In the fourth slab, for arrears exceeding one crore rupees, there are two approaches.
- For arrears under appeal (involved in legal proceedings) in this slab, 70% of the tax amount needs to be paid.
- For arrears not under appeal (not involved in legal proceedings) in this slab, 80% of the tax amount needs to be paid
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