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Profession Tax Amnesty
Scheme, 2007 – Needs Modification
The Profession Tax Amnesty
Scheme 2002 declared vide Resolution, Finance Department, No. PFT-1102/Case No.
104/2002/Taxation-3 dated 30-9-2002 was in operation in two phases spread over
between 15-11-2002 to 14-3-2003. In our knowledge there was good response to the
scheme from the professionals and business community and many of them got them
self registered/enrolled (RD). Still thousands of persons though liable to pay
tax are unregistered/un-enrolled (URD) out of ignorance or otherwise. To give
one more chance to such URDs to become RD and pay tax, the Finance Minister of
Maharashtra had proposed in the Budget speech of 2007-08 the Profession Tax
Amnesty Scheme. The same is now announced vide G.R.NO.PFT-1107/C.A.16/Taxation-3
dt.10-8-2007. Along with URD’s the scheme is also applicable to RDs who are
partially or fully in arrears of tax, interest and penalty for all or any period
between 1975 till 2007.
We are sorry to state that the
present Amnesty is drafted totally in contrast with the Profession Tax Amnesty
Scheme, 2002, as well as with other schemes under BST and Allied Acts which were
in operation in 1998, 1999 and 2004. We do understand that the Amnesty is
neither a right of erring tax payer, nor a composition scheme in lieu of tax
which can be challenged by way of appeal or Writ for denial of composition
option. What further we understand is that, once the decision is taken to grant
amnest, the draftsman of the present scheme must have referred the earlier
schemes and Trade circulars relating thereto, to know the basics of those
schemes, especially as regards waiver of penalty. Though amnesty is a mercy
shown to the erring tax-payer, the draftsman should not have drafted the same
under impression that anything thrown on the erring tax-payer will be accepted.
Being part and parcel of the
Sales Tax Department we must support the scheme and should make wholehearted
efforts to convince our clients to pay the requisite amount within the operative
period of the scheme. As it is our practice to come out with the short
publication on Amnesty Scheme, the same has been immediately taken in hand.
However after critically examining the G.R. we realized that the scheme will not
serve the desired purpose, unless it is modified in consonance with the previous
amnesty schemes, especially as regards waiver of penalty and amnesty to RD for
the periods prior to 1-4-2002.
Our representation on many
issues was forwarded to the Commissioner of Sales Tax. The Commissioner very
promptly replied to us vide letter dated 17-9-2007 by accepting some of our
suggestions. What is mainly not accepted by the Commissioner in the aforesaid
letter is 100% waiver of penalty and amnesty to RD for the periods prior to
1-4-2002. However in a meeting held on 18-9-2007, the Commissioner in principal
seems to have convinced about both the aforesaid points and has instructed the
officials to see the possibility of its review, though he has not promised
anything in concrete words.
The first point agitated by us
is about amnesty to RD for the periods prior to 1-4-2002. Our stand in case of
enrolled persons is that as there is no time barring provision under the Act for
recovery of short paid/not paid amount of tax and also for levy of penalty, it
is in justifiable and cumbersome to expect enrollees to preserve the challans of
tax paid right from 1975 to 2007 and also to know whether an application for
enrolment then filed, was in time or not. As against this, there is no burden or
responsibility on the Officer even by way of administrative circular to provide
that, if no action for recovery of tax or levy of penalty is taken within the
certain period, it will be presumed that the enrollee has paid the appropriate
amount of tax and no penalty under any section would be levied.
Secondly about the self
calculation of penalty and payment of 10% of the same, we brought to the kind
notice of the Commissioner, that the levy of penalty cannot be automatic and
even the G.R. has never stated to calculate penalty on one’s own. For this
reason, under the earlier amnesty schemes, there was 100% waiver for all kinds
of penalties.
In a study circles meeting held
in the Association on 18-9-2007, all the members present in one voice, strongly
pointed out to Mr. S. R. Bhattacharjee (Jt. Comm. of Profession Tax) and Mr. A.
A. Chahure (Dy. Comm. of Sales Tax), that to achieve good response to the scheme
it is necessary to amend the G. R. or as the case may be Trade Circular
instructions, in consonance with the representation made by the STPAM and as
this process will take some more time, it would be appropriate and must to
extend the operative period up to 31st December, 2007.
For the information of members
I hereby state that our short publication “Commentary on Profession Tax Amnesty
Scheme, 2007” though is ready, will be made available for sale only after the
expected amendments to the scheme are published and the same is modified
accordingly.
Deepak Bapat
President |
