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RESOLUTION OF PENDING DISPUTES - SABKA VISHWAS (LEGACY DISPUTE RESOLUTION SCHEME) 2019

During the Financial Budget 2019-20, a new scheme called Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 has been introduced by the Finance Act, 2019.

Summary of Excise and Service Tax waiver in Legacy Dispute Resolution Scheme

2. In order to reduce the pending litigation under the erstwhile Indirect Tax Enactments, (like the Central Excise Act, 1944, Finance Act, 1994, etc) a dispute resolution scheme namely Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019 has been proposed in Chapter V of the Finance Act, 2019. The scheme offers to grant relief from tax amount and complete waiver of interest and penalty and immunity from criminal prosecution in respect of the “tax dues” or disputes pending as on 30th June 2019 upon payment of the part of the Excise duty or Service tax.

3. The partial relief of Excise duty and Service Tax and complete waiver of interest and penalties available under the Scheme are summarized below:

SL No

Particulars

Amount of duty/tax payable and extent of relief in terms of duty/tax under the scheme.

Amount of duty/tax due is up to Rs. 50 Lakhs

Amount of duty/tax due is in excess of Rs. 50 Lakhs

Relief

Payable

Relief

Payable

1

Tax dues as per SCN not adjudicated

70%

30%

50%

50%

2

Tax dues in appeals pending disposal as on 30th June 2019

70%

30%

50%

50%

3

Tax dues as per the OIO and OIA as on 30.6.2019 and Appeal not filed.

60%

40%

40%

60%

4

Tax dues - amount in arrears

60%

40%

40%

60%

5

Tax dues declared in returns but not paid

60%

40%

40%

60%

6

Tax dues under enquiry, investigation or audit – amount quantified before 30th June 2019

70%

30%

50%

50%

7

Tax dues at SCN stage with respect to penalties, late fees – where the amount of duty is Nil or has been paid

100%

0%

100%

0%

8

Voluntary Disclosure

0%

100%

0%

100%

4. Apart from the above, the scheme also provides an opportunity to disclose the liability voluntarily by way of filing declaration through online portal, subject to conditions. In such cases, the waiver of interest, penalties and prosecution is provided under the scheme.

5. The voluntary disclosure would be helpful in the following cases:

a. If the tax payer wishes to opt for the scheme for the cases wherein the SCN/Appeal is pending before the respective authorities as on 30.06.2019 – in this situation, the department is not barred to issue an SCN for the subsequent period i.e., up to June 2017. Accordingly, if the tax payer wishes to close the issue for the period up to June 2017, they can make voluntary disclosure of the liability arising for the period up to June 2017 and get waiver of interest, penalty and prosecution.

 

b. If the client has neither disclosed the liability of tax nor paid the same, in this situation the client can voluntarily make declaration and claim relief as stated above.

6. Further, if the tax payer has disclosed the tax payable in the returns and not remitted the same, this situation has been covered under amount in arrears and relief as provided in the table can be availed.

This is for your information and if there is any such case or situation, you may avail this benefit.

 

If any assistance is required, please mail to rajesh@hiregange.com, akbar@hiregange.com

Click here to register for live webinar on Sabka Vishwas (Legacy Dispute Resolution) Scheme

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