Interest & Penalty under KarVAT
What are the penal consequences of delay in filing returns, delay in depositing VAT. What is the interest %, Kindly clarify
Delaying in remittance of VAT collected attracts intrest rate at 1.5% per month(18% PA).
Penalty for non-filing of vat returns is dealt by Section 72 of Karnataka VAT ACT. Penalty is only if dealers dont take filing seriously and delayed in filing is due to unavoidable reasons.
Section 35 of KVAT for your reference:
35. Returns.- (1) Subject to sub-sections (2) to (4), every registered dealer, and the
Central Government, a State Government, a statutory body and a local authority liable to pay
tax collected under sub-section (2) of Section 9, shall furnish a return in such form and
manner, including electronic methods, and shall pay the tax due on such return within twenty
days after the end of the preceding month or any other tax period as may be prescribed.
(2) The tax on any sale or purchase of goods declared in a return furnished shall
become payable at the expiry of the period specified in sub-section (1) without requiring
issue of a notice for payment of such tax.
(3) Subject to such terms and conditions as may be specified, the prescribed
authority may require any registered dealer.-
(a) to furnish a return for such periods, or
(b) to furnish separate branch returns where the registered dealer has more than
one place of business.
(4) If any dealer having furnished a return under this Act, other than a return
furnished under sub-section (3) of Section 38, discovers any omission or incorrect statement
therein, other than as a result of an inspection or receipt of any other information or evidence
by the prescribed authority, he shall furnish a revised return within six months from the end
of the relevant tax period except when such revised return is on issue of a debit note under
Section 30, subject to sub-section (2) of Section 72.
Section 72 of KVAT(not latest need to check the latest penalty rates): As per section the penalty is 200 per day.
72. Penalties relating to returns.- (1) A dealer who fails to furnish a return or who
fails to pay the tax due on any return furnished as required under Section 35 shall be liable
to a 1
[penalty not exceeding two hundred rupees] for each day of default in addition to a
further penalty of a sum not less than ten per cent but not exceeding fifty per cent of the
amount of tax due, together with any tax or interest due.