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Grant Thornton Technical update

Rajasthan Commercial Tax - Amnesty scheme – 2016

05 Feb 2016

Rajasthan Amnesty Scheme for Value Added Tax – 2016

Government of Rajasthan, vide notification no. F.12(16)FD/Tax/2009-116 dated. 21 January 2016 has launched an amnesty scheme with the aim to provide an opportunity to dealers to regularise their position with commercial tax department. The scheme provides for part/full waiver of interest and/or penalty subject to fulfilment of certain conditions. The scheme will now be called Amnesty Scheme – 2016.

Persons eligible to avail benefit of the scheme

  • Dealer or person against whom total outstanding demand is less than rupees INR 15 Crore.
  • The demand has been created on or before 30 June 2015.
  • The demand has been created under erstwhile Rajasthan Sales Tax Act, 1954 or Rajasthan Sales Tax Act, 1994 or Rajasthan Value Added Tax Act, 2003 or Central Sales Tax Act, 1956. (These laws are hereinafter collectively referred to as ‘relevant laws’).
  • Further, the scheme shall also apply to the dealers who have been permitted to pay the demand in installments under the ‘relevant laws’ and against whom case of prosecution has been filed by department for failure to pay the demand.

Benefits of availing the scheme

  • In case demand is under dispute, dealer is mandatorily required to withdraw pending case from concerned court, tax board or appellate authority (as the case may be) against which the benefit of amnesty scheme is availed.
  • However, in cases where appeal is filed by the revenue, proof of withdrawal of case is not required and department shall withdraw the case along charge of prosecution (wherever applicable).
  • Comply with the conditions in table below.
Category of demands Demand Created up to 31 March 2010 Demand created from 01 April 2010 to 30 June 2015
Conditions Extent of waiver of interest and penalty Conditions Extent of waiver of interest and penalty
Demand does not relate to:
(i) Evasion or avoidance of tax; or
(ii) Misuse of declaration form(s)/ Certificate(s); or
(iii) Unaccounted goods; or
(iv) Goods/vehicle in transit.		 Deposit - Whole amount of tax Full interest and penalty Deposit - Whole amount of tax + 20% of interest Penalty and remaining interest

(i.e. 80% of interest is waived)
Demand relate to:
(i) Evasion or avoidance of tax; or
(ii) Misuse of declaration form(s)/ Certificate(s); or
(iii) Unaccounted goods; or
(iv) Goods/vehicle in transit.		 Deposit - Whole amount of tax + 25% of penalty Full interest and remaining penalty

(i.e. 75% of penalty is waived)		 Deposit - Whole amount of tax + 25% of penalty + 20% of interest Remaining amount of penalty and interest

(i.e. 75% of penalty + 80% of interest)
Demand comprises entirely of interest Deposit - 10% of outstanding interest 90% of interest is waived Deposit - 20% of outstanding interest 80% of interest is waived

*Outstanding interest includes interest accrues up to the date of order under this scheme.

Procedure for availing the benefit of this scheme

  • Submit an application in form AS-I on or before 15 March 2016 along with details of deposit and proof of withdrawal of case. A dealer is required to make separate applications for each individuals outstanding demand.
  • After verifying details in application and on being satisfied on compliance with the conditions contained in this scheme, assessing authority shall reduce the outstanding demand of penalty and/or interest.
  • Assessing authority will forward a copy of AS-II to Deputy Commissioner (Administration) & Commissioner in cases where total amount of waiver is above INR 5 lacs.
  • Further, Assessing authority will forward a copy of AS-II to the applicant as an acknowledgement for discharge of dues.

Our view: This amnesty scheme is a one-time offer which provides immunity to dealers to regularise their position with the commercial tax department. The dealers should avail the benefit of the scheme and discharge their contingent dues (especially for weak matters).

Additionally, tax authorities should clarify following issues that may arise in terms of above scheme:

  • Cut-off date for ‘creation of demand’ is prescribed as 30 June 2015. It needs to be clarified that date of ‘creation of demand’ would be taken as date of demand order or date of service of order.
  • Whether ‘total outstanding demand’ in terms of above scheme shall be taken as ‘amount admitted under the scheme’ or total demand outstanding for the dealer for the relevant period.

Trust you will find the above information timely and useful.

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