Relief comes as 21,000 merchants can settle dues in one go after the Tax Law Amendment Bill’s passage

Upon the bill’s enactment, an amnesty scheme will be extended to a substantial number of over 21,000 traders currently embroiled in legal proceedings due to tax arrears. This significant initiative is designed to provide relief to those who have found themselves in these situations due to inadvertent reasons.

By offering this opportunity, the scheme seeks to alleviate the burden on traders who have found themselves in challenging situations. It emphasizes a more supportive approach to tax compliance, allowing these individuals to resolve their debts without facing further penalties or legal consequences.

Thiruvananthapuram The Legislative Assembly has successfully passed the Tax Act Amendment Bill, designed to provide legal backing for a one-time settlement scheme for tax arrears. This significant legislation is set to offer much-needed relief to 21,000 traders across the state. Finance Minister KN Balagopal introduced the bill in the Assembly, highlighting its importance for the local business community.

The Kerala Taxation (Bhegadati) Bill, 2024, is a proactive response to the challenges faced by traders entangled in legal proceedings over tax arrears. Many of these cases stem from inadvertent reasons, necessitating a clear path to resolution. The passage of this bill marks a significant step towards alleviating the burden on affected traders.

Once enacted, the amnesty scheme will empower these individuals to settle their outstanding tax liabilities without facing further legal consequences. This initiative is a clear demonstration of the government’s commitment to fostering a more supportive environment for traders, promoting compliance while alleviating financial pressures stemming from past inadvertent errors.

The bill introduces provisions to extend benefits to individuals who have claimed input tax credits beyond the specified timeframe, recognizing the need for flexibility in tax compliance. This initiative acknowledges that circumstances may arise where taxpayers inadvertently exceed deadlines, and it aims to facilitate their ability to rectify these situations. Additionally, the time limit for issuing GST notices under Section 74A has been consolidated to three and a half years. This consolidation aims to streamline the process and provide clarity for taxpayers and tax authorities, ensuring that businesses can handle their tax obligations.

Furthermore, the legislation incorporates several provisions regarding implementing the Tribunal, enhancing the framework for resolving tax-related disputes more effectively. This includes establishing clear guidelines for the Tribunal’s operation, designed to expedite the resolution process and reduce the backlog of cases. To maintain the taxability of Extra Neutral Alcohol (ENA) within the state’s tax regime, the bill specifies that ENA falls outside the scope of GST. This designation protects state revenue while clarifying the tax structure for businesses involved in the production and distribution of ENA. Collectively, these measures reflect a commitment to simplifying tax regulations, promoting transparency, and ensuring proper oversight and compliance within the state’s fiscal framework. By addressing these critical areas, the bill seeks to foster a more conducive environment for businesses, encouraging compliance while safeguarding state interests.

The bill introduces two additional sections that address aspects outside of GST, explicitly clarifying specific points within the Amnesty framework. One significant amendment pertains to the Amnesty Act of 2024, which offers a waiver of unutilized penalties related to taxes or surcharges amounting to less than Rs. 50,000. This change is particularly relevant in assessing the Social Security Cess introduced by the Finance Act 2008. By addressing these penalties, the bill aims to reduce the financial burden on taxpayers and encourage them to engage with the amnesty program.

Moreover, these amendments seek to simplify the compliance process for taxpayers and aim to foster a culture of voluntary compliance within the tax system. The bill demonstrates a commitment to creating a more equitable tax environment by providing clarity and support to individuals and businesses. This proactive approach facilitates smoother interactions between taxpayers and authorities, ultimately promoting a more efficient tax administration. These provisions reflect a broader strategy to enhance taxpayer trust and cooperation while ensuring that the system remains fair and just.

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