Karasamadhana Scheme, 2023

The Government of Karnataka issued a notification on 18 July, 2023 introducing Karasamadhana Scheme, 2023. This Scheme was introduced in order to expeditiously resolve pre-GST legacy tax disputes and to collect arrears promptly without litigation. Key features of the scheme:

1. Under this scheme, eligible dealers will be granted a waiver of 100% of arrears of penalty and interest that they are liable to pay under the Karnataka Sales Tax Act, 1957 and the Central Sales Tax Act, 1956. These arrears may be related to assessments, re-assessments, rectifications, revisions, and appeal orders that have already been completed or will be completed on or before 31-10-2023 under the KST regime.
2. The Scheme grants, waiver of 100% of arrears of penalty excluding those specifically mentioned and interest payable by a dealer under the Karnataka Value Added Tax Act, 2003 and Central Sales Tax Act, 1956 relating to the assessments / re-assessments / rectification/ revision / appeal orders already completed and to be completed on or before 31-10-2023.
3. It grants waiver of a. penalty levied relating to returns and assessments under the Karnataka Value Added Tax Act, 2003 and consequential interest subject to the condition that the amount of tax as admitted in the return or assessed is paid in full. Penalty levied for failure to submit copy of the audited statement of accounts in FORM VAT 240 under the Karnataka Value Added Tax Act, 2003 and consequential interest subject to the condition that admitted tax liability, if any, as per FORM VAT 240 is paid in full.
4. It grants waiver of 100% of arrears of penalty and interest payable by a dealer or person or proprietor as the case may be relating to the assessments / re-assessments/ rectification/ revision/ appeal orders already concluded and to be concluded upto 31-10-2023 under following Acts –
   a. Karnataka Tax on Entry of Goods Act, 1979,
   b. Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976
   c. Karnataka Tax on Luxuries Act, 1979
   d. Karnataka Agricultural Income Tax Act, 1957
   e. Karnataka Entertainments Tax Act, 1958
5. It grants 100% waiver of arrears of interest and penalty excluding those specifically mentioned, payable by a dealer or person or proprietor as the case may be relating to a. revision orders already concluded; or b. revision proceedings initiated prior to the date of issuance of this Government Order and revision orders to be completed on or before 31-10-2023 in respect of all the Acts mentioned in the Preamble.