Karnataka Tax on Profession, Trades, Callings and Employments (Amendment) Act, 2023

The Karnataka Government on 14th March 2023 notified the Karnataka Tax on Profession, Trades, Callings and Employments (Amendment) Act, 2023, as it received the Governor’s assent on 13th March 2023.

It became important for the Karnataka Government to amend the Karnataka Tax on Profession, Trades, Callings and Employments Act, 1976 (Karnataka Act 35 of 1976), for many reasons. Several amendments made for a purpose are as follows:

1. The Act has inserted more clauses, such as “agent” and “assessment,” for better interpretation.
2. The enrolled person pays tax according to Section 10(6) to reduce the interest rate where a person making a deduction defaults from 2% to 1.5%.
3. The penalty for non-payment of tax under section 12 of the 1976 act has been amended from 50% to a fixed amount of ten percent whether or not a reasonable cause exists.
4. A person is liable to pay tax if he falls under more than one entry in a schedule.
5. The basis for calculating tax liability by Serial No. 4 in this Schedule shall be counted by the more significant number of workers or employees at any time during the year
6. Where a lessee holds any asset or business under a lease, the lessee shall be deemed to be the person liable under the Act for this Schedule.
7. If a firm is obligated to pay and its partners pay their share, then the partners are exempt from liability under this Act.
8. Nothing in this amended explanation shall apply in the case of additional places of business exclusively used as godowns for storing goods, etc.
9. Each place of a person listed in any item of the Schedule shall be treated as a separate person for levy of the Profession tax specified in the Schedule.