Profession tax enrolment amnesty scheme, pay tax for 3 years instead of 8 years

Arjun (Fictional character): Krishna, Profession Tax is also paid by the self-employed person. The Sales Tax Department of Maharashtra has introduced Amnesty Scheme. So what is this scheme all about?

Krishna (Fictional character): Arjuna, Profession Tax comes in the ambit of Maharashtra Sales Tax Department and is named as Maharashtra State Tax on Profession, Trade, Calling and Employment Act 1975. Every self-employed person has to pay profession tax every year. But due to the lack of knowledge about profession tax, many taxpayers neither follow nor pay profession tax. Government after finding such taxpayers who does pay taxes, recovers the tax for last 8 years and in addition also imposes the interest and penalty as applicable. To get relief from such interest and penalty, Government has introduced “Profession Tax Enrolment Amnesty Scheme, 2016. This scheme is applicable only to the unregistered persons as on 1-4-2016, those who are already registered before 1-4-2016 cannot avail the scheme.

Arjun: Krishna, on which type of persons is profession tax applicable?

Krishna: Arjuna, profession tax is applicable to every self-employed person. For Example: Doctors, Lawyers, Architect, CA, Shopkeepers, etc. and also by Company, Society etc. Profession tax is not applicable to Partnership firm and HUF, as profession tax is applicable to every partner of the partnership firm. In case of companies it is applicable to all the directors. Profession tax is not applicable to persons above the age of 65. Majority of persons fall in Rs. 2500 slab. Due date of profession tax is 30th June every year. Different slab rate of tax are there for different persons. The profession tax for FY 2016-2017 has to be paid till 30th June 2016. If profession tax is not paid before the aforesaid due date then interest at the rate of 15% p.a. has to be paid. If the taxpayer have one or more business, such person has to pay profession tax only once. Example: if one person is a company director and is also a partner of the partnership firm then he has to pay profession tax only once.

Arjun: Krishna, what are the special features of this new Amnesty Scheme?

Krishna: Arjuna, Maharashtra Profession Tax Enrolment Amnesty Scheme, 2016 has been introduced for all the unregistered persons by amendment of section 3 in the act. Earlier, if a person has not done profession tax registration then the person after taking registration had to pay profession tax for the period of 8 years along with the interest and penalty as applicable. But now the person can take benefit of the new Amnesty Scheme introduced, where, after taking registration the person has to pay profession tax only till 01/04/2013 which means he has to pay profession tax and interest only for 3 years. The taxpayer will be waived from penalty.  Thus last 5 years tax and interest is waived, if applicable to him.

Arjun: Krishna, what does a person need to do to apply in this scheme?

Krishna: Arjuna, the person can take benefit of this scheme till 30/09/2016 and for this:

1. Unregistered person has to visit www.mahavat.gov.in website and under e-services menu he has to select registration and request for the registration. Those who are unregistered from 1-4-2016 and whose application is pending as on that date can avail the scheme.
2. Within 3 days, persons will receive the Enrolment Certificate TIN Number. Persons can download the PTEC Registration Certificate from the download menu.
3. After this, fill the TIN number and pay the tax online of last 3 years and interest.
4. There is no separate application required to avail the scheme. Just go and get registered.
5. In case of any problem, the person can contact the Joint Commissioner of Sales Tax Department.

Arjun: Krishna, what do we learn from this new scheme introduced?

Krishna: Arjuna, Government has introduced this scheme so that every businessman pays the profession tax. Many persons are new so they don’t have the knowledge of the tax system or some persons purposely do not take registration due to the fear of having to pay large amount of tax. But now for the unregistered persons, government has introduced the new scheme where all the persons should take the benefit of it and fulfil their responsibility towards it. The government mentioned in the circular that if any person does not enrol, then strict action will be taken against him. And in addition to the above the person has to pay tax for 8 years along with the interest and penalty as applicable or may also face prosecution.