EXTRACT OF THE KERALA FINANCE ACT, 2008.
ACT 21 of 2008
NOTIFICATION No. 5012/Leg. A2/2008/Law. Dated,29th July, 2008
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 28th day of July, 2008.
By order of the Governor,
V. G. KUMARI GIRIJA,
Special Secretary (Law).
An Act to give effect to certain financial proposals of the Government of Kerala for the Financial year 2008-2009.
Preamble.-WHEREAS, it is expedient to give effect to certain financial proposals of the Government of Kerala for the Financial year 2008-2009;
BE it enacted in the Fifty-ninth Year of the Republic of India as follows:-
1. Short title and commencement.-
(1) This Act may be called the Kerala Finance Act, 2008.
(2) Save as otherwise provided in this Act,-
(a) clause (b) of sub-section (6), sub-section (16), sub-section (17), sub-section (20), item (iii) and serial No. 60 inserted by item (iv) of clause (a) of sub-section (22) of section 5 shall be deemed to have come into force on the Ist day of April, 2005;
(b) 3rd proviso to clause (ii) of sub-section (3) of section 5 shall be deemed to have come into force on the 24th day of April, 2007;
(c) items (v), (vi) and (vii) of clause (b) of sub-section (22) of section 5 shall be deemed to have come into force on the 22nd day of October, 2007;
(d) the remaining provisions of this Act shall be deemed to have come into force on the 1st day of April, 2008;
3. Amendment of Act 15 of 1963.-
In the Kerala General Sales Tax Act,1963 (15 of 1963),-
(1) in section 17,-
(a) for the fourth provisos to sub-section (6), the following proviso shall be substituted, namely:-
"Provided also that the assessment relating to the years up to and including the year 2003-04 pending as on 31st March, 2008 shall be completed on or before the 31st day of March, 2009."
(b) in sub-section (8),-
(i) for the first proviso, the following proviso shall be substituted, namely:-
"Provided that all such assessments or re-assessments pending as on the 31st day of March, 2008 shall be completed on or before the 31st day of March, 2009."
(ii) for the third proviso the following proviso shall be substituted, namely:-
"Provided also that all such modified assessments or modified reassessments or remanded assessments pending as on the 31st day of March, 2008 shall be completed on or before the 31st day of March, 2009."
(2). In section 17D, in clause (E) of sub section (2) the following shall be added at the end, namely,-
"and in cases where the returns are not acceptable, the following criteria may be adopted for determining their tax liability namely
(i) In case where the dealer had compounded the offence under section 47, or penalty under section 45A or 29A has been levied, the assessment may be completed on an addition proportionate to the period of suppression with reference to the quantum of suppression detected, limiting the tax effect on such addition to a maximum of three times of the compounding fee paid or tax effect of suppression detected, whichever is higher, and in case where a pattern of suppression has not been established, to an amount equal to the suppression detected.
(ii) In case where tax evaded cannot be quantified, the assessment may be completed on an addition equal to five per cent of the taxable turnover conceded by the dealer as per his returns or accounts, subject to tax effect of a minimum five thousand rupees /- and a maximum of one lakh rupees.
(iii) In case where statutory forms and / declarations in support of claim of concessional rate of tax or exemption have not been filed or are partially filed, or where the forms have been misused, the assessment may be completed by disallowing such claims, to the extent of the defect in such forms, assessing it under this Act.
(iv) In case of contracts where option for compounding under the provisions contained in section 7 of this Act, as it then existed have been filed, and where returns and tax deduction certificate issued by the awarder have been produced, assessment may be completed accepting the awarder's certificate.
(v) In case of contracts in respect of which tax is paid under section 5 of this Act, and where returns and statement of accounts have been filed, but the returns are found to be incorrect or incomplete, assessments may be completed determining additional tax payable at twenty per cent of tax payable subject to a minimum of ten thousand rupees:
Provided that the amnesty scheme envisaged in section 23(B) shall also be applicable to assessment completed as per this section.
(3) after section 23AA, the following section shall be inserted, namely;
"23B. Reduction of arrears in certain cases-
(1) Notwithstanding anything contained in this Act, or in any judgment, decree or order of any tribunal, an assessee who is in arrears of tax or any other amount due under the Act relating to the period ending on 31st March, 2005, may opt for settling the arrears by availing reduction at the following rates:
(a) in the case of demands relating to the periods up to and including 31st March 1991, a reduction of twenty five percent for the tax amount, and complete reduction of the interest on the tax amount and for the amount of penalty and interest thereon;
(b) in the case of demands relating to the period from 1st April, 1991 to 31st March, 1996, a complete reduction of the interest on the tax amount, and for the amount of penalty and interest thereon;
(c) in the case of demands relating to the period from 1st April, 1996 to 31st March 2000, a reduction of ninety five percent of the interest on the tax amount, and for the amount of penalty and interest thereon;
(d) in the case of demands relating to the period from 1st April, 2001 to 31st March 2005, a reduction of ninety percent of the interest on the tax amount, and for the amount of penalty and interest thereon; and
(e) in cases where principal amount has already been remitted prior to coming into force of Section 55C of the Act, a reduction of ninety percent of the interest amount.
(2) Notwithstanding anything contained in the Kerala Revenue Recovery Act, 1968, reduction of arrears under sub-section (1) shall be applicable to those cases in which revenue recover 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 sub section(1) the assessing authorities shall withdraw the revenue recovery proceedings against such dealers which will then be binding on the revenue authorities and such dealers shall not be liable for payment of any collection charges.
(3). A dealer who wishes to opt for payment of arrears under sub-section (1) shall make an application to the assessing authority in the prescribed form before 30-6-2008.
(4). On receipt of an application under sub section (3) the assessing authority shall workout the actual amount of tax and other amounts due from the dealer under sub section (1) and shall intimate the amount to the dealer, and thereupon the dealer shall remit twenty five per cent of the amount within fifteen days of receipt of the intimation, and the balance amount in three equal monthly installments starting from the subsequent month.
(5) If the dealer commits any default in payment of the installments the reduction granted under sub section (1) is liable to be revoked.
(6) No action under sub section (5) shall be taken without giving notice to the dealer.
(7) If the amount settled under this provision has been a subject matter of appeal or revision, such appeal and revision may be continued and if the final orders of such appeal or revision results in the reduction of tax payable under this Act, the amount so reduced shall be refunded. But if, as the result of such appeal or revision, the tax payable under this Act is enhanced, the dealer shall pay such enhanced amount, with interest thereon, in accordance with the provisions of this Act."
(4). In section 34,
In sub section (1),
(a) after the words, brackets and figures "under sub-section (6) or sub-section (7) of section 14" the words, figure and letter " under section 14A" shall be inserted,
(b) after the words and figure " under section 43" the words, figure and letter "and section 45A" shall be inserted.
6. Levy and Collection of Cess
1. There shall be levied and collected from dealers a Cess at the rate of one per cent on the tax payable by them under sections 6 and 8 of the Kerala Value Added Tax Act, 2003 (30 of 2004) and section 5 and section 7 of the Kerala General Sales Tax Act, 1963 (15 of 1963), to be called the Social Security Cess, to fulfil the commitment of the Government to provide and finance a comprehensive social security scheme.
2. Notwithstanding anything contained in sub-section (1) no cess shall be levied in respect of declared goods as defined in section 14 of the Central Sales Tax Act, 1956(Central Act 74 of 1956).
3. The Government may, after due appropriation made by the Legislature by law in this behalf, utilize such sums of money of the Social Security Cess for the purposes specified in subsection (1).
4. The provisions of section 30 of the Kerala Value Added Tax Act, 2003 (30 of 2004) and Section 22 of the Kerala General Sales Tax Act, 1963 (15 of 1963) shall be applicable for the collection of cess as per sub-section (1)
(5) The provisions regarding the assessment, input tax credit, special rebate and recovery in the Kerala Value Added Tax Act, 2003 and assessment and recovery in the Kerala General Sales Tax Act, 1963 shall mutatis mutandis apply to Cess under this section.
7. Validation.-
Notwithstanding anything contained in the Kerala General Sales Tax Act, 1963 (15 of 1963) and the Kerala Value Added Tax Act, 2003 (30 of 2004), during the period from 1st April, 2008 to the date of publication of this Act, during which the declared provisions contained in the Kerala Finance Bill, 2008 (Bill No. 178 of the XII Kerala Legislative Assembly) were in force, anything done or any action taken by virtue of the said provisions of the said Bill shall be deemed to have been validly done or taken under this Act and no action shall lie against any dealer or authority on the ground of short levy or refund of excess tax, and tax collected or paid by a dealer, if any, shall be paid over to the Government.