Kerala Govt. launches Amnesty Scheme 2020 to settle Pre-GST Tax Arrears


The Kerala Government has introduced the Amnesty Scheme, 2021 to settle pre-GST Tax Arrears through the Kerala Finance Bill, 2021. The Government has unveiled an amnesty scheme to settle outstanding tax dues about the period before the introduction of the Goods and Services Tax to clear the backlog of arrear demands. The new amnesty scheme has been announced to provide mutual benefit both to the taxpayer and the revenue to clear all dues which were not settled in the earlier announced amnesty scheme. The amnesty scheme shall apply to the outstanding dues under the following legacy statutes stands modified with certain conditions;

  • Kerala Value Added Tax Act,
  • Central Sales Tax Act,
  • Tax on Luxuries Act,
  • Kerala Surcharges Act,
  • Kerala Agriculture Income Tax Act
  • Kerala General Sales Tax Act.

Key Highlights of the Amnesty Scheme, 2021

  • 100% waiver of interest and penalties.
  • 40% waiver of the balance tax arrears, if the outstanding dues are paid in lump- sum.
  • 30% waiver of the balance tax arrears, if the outstanding dues are paid in installments.
  • Amnesty scheme will be applicable for all pending tax arrears including cases in appeals (Except arrears under KGST from 2005 onwards).
  • Option to avail the amnesty scheme should be made on or before 31 August, 2021.
  • For those who opt for the payment of arrears in installments, the first installment thereof shall not be less than 20% of the amount determined and such amounts shall be paid within 30 days of the receipt of the intimation. The balance amounts are to be paid in installments, subject to a maximum of 4 installments.
  • In the case of demands that have been newly generated after 31st August 2021, the option shall be exercised within 30 days from the date of receipt of such order. However, in all such cases the final payments shall be made on or before 31st March, 2022.
  • The last date for payment of the amounts determined under the scheme shall be 31st March, 2022.
  • Tax payer who has failed to settle arrears under the previous amnesty scheme can also opt this scheme.
  • No refund shall be allowed under the scheme.

The arrears for the purpose of settlement under this scheme shall be calculated as on the date of submission of option. The person who have opted for amnesty schemes earlier, but could not settle the arrears, can also opt under this scheme


Kerala Finance Bill

Circular No. CT/1/2021-C1

Knowledge Source:

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