The imposition of transaction tax can be found through much of the ancient and medieval civilizations. Tomb paintings depict tax collectors in Egypt as early as 2000 BC, and sales taxes on individual commodities, such as cooking oil, can be traced to that time. Egypt, Athens, and Rome were all known to have general sales taxes. Indeed, the Romans were responsible for taking sales taxes to the rest of Europe, including to both Spain and France. Later, Spain had a national sales tax in place from 1342 until the 18th century, with rates that ultimately reached 10 to 15 percent. Specific commodity taxes were so broadly imposed during the U.S. civil war, that when combined, they nearly formed a general sales tax. Similarly taxation of commodities has also a long history in India and Karnataka too. Kautilya, a great Indian statesman in the Mourya kingdom, more than two thousand years ago anticipated classical economic thought in international trade, taxation and labour value. Kuatilyawrote “Arthashastra”an epic treatise on the art of good governance and views on increasingthe monarch’s wealth and realm. Kuatilya enunciates a set of principles of taxation remarkably similar to modern day criteria first formulated by AdamSmith as “Canons of taxation” in his Wealth of Nations. Kautilya’s discussion of taxation gave expression to three principles: taxing power should be limited; taxation should not be felt as heavy or excessive; tax increases should be graduated. Kuatilyarecognises that the ideal tax system should embody the following: easy to calculate, inexpensive to administer, fair (equitable in its burden), non-distortive of economic behavior in its impact (neutral), and in general not inhibit economic growth and development. Unfortunately, for the development of economic thought, Kautilya’s writings were not discovered until twentieth century.
VAT or Value Added Tax is levied at every level of multi- stage taxation and is applicable under Commercial Tax Karnataka also. Thus, every stage of sales is taxed using VAT. However, it is the procurement stage where the tax payers receive credit. VAT is presently followed in 160 countries all around the world including India. But the Indian model is a little different for Vat as compared what is followed in other countries. Karnataka Commercial Tax Department used to follow State Sales Tax System which has today been replaced by VAT.
E-Filling System Of Commercial Tax
Using this system, transporter can request for Transit Pass form of Karnataka and download it from the system. Subsequently, they can reach the Checkposts of Karnataka for faster clearance. You can read the User Manual for further details.
- Extensive coverage: Value Added Tax, Karnataka Sales Tax, Central Sales Tax, Professional Tax, Entertainment Tax Act, Luxuries Tax Act, Entry Tax Act.
- Easy Accessibility : Acts sorted by Section Nos. and Subject, Rules sorted by Rule Nos. and Subject, Statutory Forms sorted by Form Nos. and Subject, Schedules Rates sorted by Schedule Nos. - and item wise alphabetical listing.
- Easy Navigation: Hyperlinks from Acts to Rules, Rules to Forms, Rates to Notifications, and from Notifications to Notifications.
- Item wise linking of Notification: Notification linking with indication of effective Date for Value Added Tax, Karnataka Commercial Tax, Central Sales Tax and Entry Tax.
- Superior search capability: Advanced multiple-search options ensures search facility with a simple keyword.
- Ready-to-use Statutory Forms: Option to open forms in Word.
- First minute functioning : simple-to-use structure eliminates the necessity for training.
- All tax laws on web : All major Commercial Tax Laws of Karnataka on Web.
- Notification Update : As and when the company receives the notifications from sources it will be intimated & updated via email.
- Quarterly Update : Program update, once in 3 Months, updates the package with latest information.
- VAT Rates : Provided Vat Rates
Karnataka Commercial Tax e-payment System
Karnataka became the first State in the country to launch an e-payment system for commercial tax payers.
Speaking at the launch, Reserve Bank of India Deputy Governor Shyamala Gopinath wanted such a system to be adopted by other States. The system enables dealers to remit their commercial taxes anytime, anywhere, without physically approaching an office of the Commercial Taxes Department (CTD).
Right now, e-remittances can be made from six banks - SBI, SBM, SBH, Syndicate Bank, Canara Bank and Union Bank of India.
Chief Minister B S Yeddyurappa said more public sector banks would be added to the list going forward. He said the system would also help curb tax evasion.
Mr. Gopinath launched the reconciliation portal of the CTD.
Commercial Taxes Department officials said the new model was a “comprehensive e-payment reconciliation system” that would “run seamlessly from the dealer up to the government treasury”.
The CTD collects more than Rs 2,000 crore per month and till now, these collections were by way of cheques by the dealers.
Every month on average, more than one lakh cheques were received by various offices of the CTD and these are then sent to the agency bank, which in turn processed them and remitted to the government account.
This involved a huge amount of manual work and at the same time, delay in realisations of amount and some cases of bounced cheques also. The reconciliation process was very difficult. Also, dealers were inconvenienced as they had to come to the respective offices and wait in a long queue to remit the tax.