Kerala plans amnesty for presumptive tax payers
The amnesty has two major advantages.
THIRUVANANTHAPURAM: Finance minister Dr Thomas Isaac will employ a ‘carrot and stick’ policy to widen the state's tax net. He will launch an amnesty scheme for presumptive tax payers who continue to suppress their actual turnover, but with the stern warning that any reluctance could hurt them in future. “Once the system scrutiny is put in place, the actual state of affairs of unaccounted purchases can easily be identified by the commercial sales tax department. This amnesty scheme will not be available in future,” the minister said.
The amnesty has two major advantages. It encourages ‘suppressors’ to come clean without the state having to impose its might on erring traders in the form of raids. More importantly, it will help the department to draw up a list of traders doing a business of over Rs 60 lakh monthly. It is estimated that there are over one lakh dealers having a turnover above Rs 60 lakh and are still paying presumptive tax by masking the actual sales.
Dr Isaac’s is no empty threat. The CST department has already issued notices to around 20,000 such dealers with evidence. As per the statute, they will have to pay tax at scheduled rates without input tax credit and thrice the amount of tax as penalty. “Trade organisations have pointed out the severity of this burden. So we have decided to implement an amnesty scheme for these dealers,” Dr Isaac said.
Under the scheme, the unaccounted transactions of presumptive tax dealers will be taxed at scheduled rates, which is higher than the ‘presumed’ tax.
Once in the scheme, all penalties, including the 300 percent penalty, will be waived. Also, 30 percent of the tax determined has to be paid immediately and the rest in 12 equal monthly instalments. The scheme is open to all presumptive tax dealers whose unaccounted purchases have been detected by the department for the period up to March 31 this year. Even those who have not been scrutinised can join the scheme because as Dr Isaac hinted the state could unleash a crackdown next fiscal.