VAT Amnesty Scheme:-
As in KGST, they intend to launch an extensive amnesty scheme for redressing the disputes by granting the relief from excessive penalties and interest. The following amnesty scheme will be implemented in the Value Added Tax Act
1) In the case of VAT dealers, if the tax arrears of the assessment years from 2005-06 to 2010-11 is completely remitted, the interest thereon and 70% of the penalty amount and interest on the penalty, shall stand waived.
2) All arrears pertaining to a year shall be settled together
3) An assessee opting to settle arrears under this scheme shall withdraw all cases, revision, and appeals pending before any forums.
4) Tax arrears and interest shall be calculated as on the date of submission of application.
5) Arrears under CST Act for the above period can also be settled under this Scheme.
6) The last date for filing option under this scheme shall be 30th June 2017. Amount reckoned under the scheme shall be paid by equal installments on or before 31st December 2017.
- There were certain disputes in determining the nature of works contract involved in the installation of kitchen cabinet works, aluminum fabrication works, air-conditioning plant installation. In these cases, the tax determined under compounding scheme was re-assessed and taxed at scheduled rate. Interest and penalty were also imposed.
- In cases were compounded tax was paid by the contractors for such contracts, they shall be exempted from paying tax at scheduled rate, provided all the purchases are from within the State and such contractors shall pay 2% tax for total contract amount over and above compounded tax already paid.
- This scheme will be applicable for the assessments up to the FY 2014-15.
- The previous Government had exempted tax under VAT for natural rubber and its variants for the period from 20th December 2014 to 1st March 2015 by notification. But necessary provisions to this effect were not incorporated in the Finance Act.
- Hence, rubber dealers are liable to pay tax and interest for the above period. It is announced that natural rubber and its variants are exempted from tax for the period from 20th December to 31st March 2015.
- The tax rate for solar energy devices and spare parts is currently 1%. But 14.5% is levied for the installation of such devices, considering it as works contract. The tax rate of such works will also be fixed at 1%. This will have retrospective effect from 01.04.2013 from the date on which the tax rate of solar energy devices was reduced to 1%. But, tax paid during this period based on the assessment done will not be refunded.
- Packing materials used in exporting goods is liable to be taxed. The packing materials used in exporting goods will be exempted from tax, subject to conditions, for the period from 2005- 06 up to the year on which the Division Bench of the Hon’ble High Court has rendered its judgment in such cases. Tax already paid during this period will not be refunded.
Presumptive Tax Dealers:-
- In the 2016-17 budget, an amnesty scheme was declared for presumptive tax dealers in VAT Act. To settle the cases as per the scheme, total turnover will be calculated adding 5% gross profit on unaccounted purchases along with the sales turnover declared as per return.
- If the total turnover calculated for a year by adding 5% gross profit on unaccounted purchase is below the threshold limit as per Sec.6 (5), then such dealer shall pay tax at the rate of half percent. If the turnover thus calculated is above the threshold limit as per Sec.6 (5) and up to rupees one crore, then the dealer shall pay tax at the rate of 1% for the turnover above the threshold limit.
- And if the turnover is above rupees one crore, the dealer shall pay tax at the rate of 2% for the turnover above rupees 1 crore and 1% for the turnover in between threshold limit and up to rupees one crore. In general, 0.5% shall be paid for the turnover up to threshold limit. Option to settling under the scheme shall be submitted before the assessing authority on or before 30th June 2017.
- The assessing authority shall intimate the applicant, the amount to be paid as per the scheme within 15 days from the date of receipt of the option. The applicant shall pay 30% of the amount within 15 days from the date of intimation and balance amount on or before 31st December 2017. The dealer shall opt this scheme for all those years for which he had unaccounted purchases. Assessment and revenue recovery steps will be intensified for those who have not opted under this scheme.
- No statutory re-examination or refund will be allowed in cases settled under this scheme. This scheme is also applicable for those dealers who have opted amnesty scheme for 2016-17 but had defaulted payments. There will be no other changes in the conditions prescribed under the amnesty scheme for 2016-17.