The following Act of the Kerala State Legislature is hereby published for general information. The Bill as passed by the Legislative Assembly received the assent of the Governor on the 19th day of July, 2019.

By order of the Governor,

ARAVINTHA BABU. P. K.

Law Secretary.

Act No. 5 of 2019

EXTRACT OF THE KERALAFINANCE ACT, 2019

An Act to give effect to certain financial proposals of the Government of Kerala for the Financial Year 2019-2020.

Preamble.-Whereas, it is expedient to give effect to certain financial proposals of the Government of Kerala for the Financial Year 2019-2020;

Be it enacted in the Seventieth Year of the Republic of India as follows:-

1. Short title and commencement-

(1) This Act may be called the Kerala Finance Act, 2019.

(2) Save as otherwise provided in this Act, it shall be deemed to have come into force on the 1st day of April, 2019.

11. Amendment of Act 30 of 2004.-

In the Kerala Value Added Tax Act, 2003 (30 of 2004),-

(1) in section 4, in sub-section (4), in item (v), for the words, "other than the Chairman", the words, "other than the Chairman of the Appellate Tribunal or the Presiding Officer of the Additional Appellate Tribunal" shall be substituted.

(2) after section 25A, the following section shall be inserted, namely:-

"25AA. General disciplines related to assessment under this Act.

(1) In cases where tax evasion has been detected and the offence has been compounded or penalty has been imposed under this Act, the assessment under the provisions of this Act shall be done only on the suppressed turnover detected:

Provided that in cases where pattern of suppression has been established, the assessment shall be completed by adding fifty per cent to the suppressed turnover.

(2) In case of assessments initiated from the scrutiny of electronically filed returns, annexures and other declarations,-

(a) with respect to unaccounted purchases from registered dealers within the State by dealers, notwithstanding anything contained in this Act, input tax credit shall be granted on such purchases, provided the dealer admits such purchases. In such cases, assessment shall be completed by adding 20 per cent gross profit on the purchase value.

(b) In case of detection of suppression or variation in inter-State purchases, inter-State stock transfers, import and purchases from unregistered dealers, 25 per cent gross profit shall be added to such purchases for arriving at the sale value and assessed to tax.

(c) If sales suppression is detected, only the differential turnover between the suppressed turnover and the turnover conceded shall alone be assessed.

(3) Discounts, incentives and other income shown in trading, profit and loss account shall be assessed only if, it affects the output tax or input tax credit.

(4) Suppressed turnover of works contractors and cooked food dealers who have paid compounded tax under clauses (a) and (c) of section 8 shall be assessed at the applicable compounded rate by adding 25 per cent of the v suppressed turnover and in such cases the option of compounding shall not be cancelled.

(5) If any suppression of turnover of gold is detected with respect to dealers who have paid compounded tax under clause (f) of section 8, such suppressed turnover alone shall be assessed at the schedule rates applicable to the goods and in such cases the option of compounding for that year shall not be cancelled.

(6) Those dealers, who have defaulted in submitting the statutory forms for applying concession or exemption in tax under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) or under this Act, assessment shall be limited only to such turnover not covered fay such statutory forms.

(7) If any difference in turnover is disclosed in annual return, trading, profit and loss account and audit report, is noticed, subject to other provisions of this Act, the assessment in such cases shall be limited only to such variation.

(8) in case of variations between return and books of accounts pointed out voluntarily by the dealer subject to the returns annexures and statements filed by the dealer assessment shall be limited to such differential

turnover only."

(3) in section 25E,-

(i) in sub-section (2), for the words and figures, "30th June, 2018", the words and figures, "30th September, 2019", shall be substituted;

(ii) in sub-section (5), for the words and figures, "30th September, 2018", the words and figures, "31st March, 2020", shall be substituted.

(4) for section 31A, the following section shall be substituted, namely;-

"31A. Reduction of armors in certain cases.-

(1) Notwithstanding anything contained in this Act or rules made thereunder or in any judgment, decree or order of any court, tribunal or appellate authority, any assessee who is in arrears of tax or any other amount due under this Act or under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) relating to the period up to and including 30th June, 2017, may opt for settling the arrears on payment of the principal amount of the tax in arrears by availing a complete reduction of the penalty amount, interest on the tax amount and on the penalty amount:

Provided that in case where the evidence, details and records pertaining to the penalty levied is not utilized or not liable to be utilized for any best judgment assessment under this Act, the demand relating to such penalty shall be settled under this section on payment of applicable tax relating to the penalty as determined by the assessing authority.

(2) Notwithstanding anything contained in the Kerala Revenue Recovery Act, 1968, (15 of 1968) reduction of arrears under sub-section (1) shall be applicable to those cases in which revenue recovery proceedings have been initiated and the assessing authorities shall have the power to collect such amounts on settlement under sub-section (1) and where the amount is settled under subsection (1) the assessing authorities shall withdraw the revenue recovery proceedings against such assessees which will then be binding on the revenue authorities and such assessees shall not be liable for payment of any collection a charges.

(3) The assessee shall withdraw all the cases pending before any appellate or revisional authority, tribunal or courts for opting for settling the arrears under this section.

(4) All arrears including tax and penalties pertaining to a year shall be settled together under this section.

(5) An assessee who intends to opt for payment of arrears under subsection (1) shall submit an option to the assessing authority on or before 30th September, 2019:

Provided that with respect to demands generated after 30th September, 2019, the option may be filed within 30 days from the date of receipt of the order and in such cases the final payment of tax and other amounds due as per this section shall be completed on or before 31st March, 2020.

(6) The arrears for the purpose of settlement under this section shall be calculated as on the date of submission of option.

(7) On receipt of the option under sub-section (5), the assessing authority shall determine the amount of tax and other amounts due from the dealer under sub-section (1) and shall intimate the same to the dealer, and thereupon the dealer shall remit the amount in a maximum of six instalments on or before 31st March, 2020.

(8) Notwithstanding anything contained in section 91, if an assessee who opts to settle his arrears under sub-section (1) has remitted or deposited any amount relating to the arrears after the service of demand notice, such amounts shall be given credit as tax including the tax paid under clause (a) of sub-section (1) of section 74, such amount shall be given credit as tax under this option and the assesse shall furnish the proof of payments made in this regard:

Provided that, any amount paid towards penalty or its interest shall not be credited towards tax.

(9) There shall not be any refund or any adjustment subsequently for the amount settled under this scheme, under any circumstances.".

(5) in section 31B, in clause (b), for the words and figures, "31st March, 2019", the words and figures, "30th September, 2019", shall be substituted.

(6) in section 42, in the second proviso to sub-section (2) , for the words and figures, "30th June, 2018", the words and figures, "30th September, 2019" shall be substituted.",