12 FAQ's on Sabka Vishwas Legacy Dispute Resolution Scheme

FAQ's on Sabka Vishwas Legacy Dispute Resolution Scheme

A dispute resolution cum amnesty scheme called the  Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 is being introduced for resolution and settlement of legacy cases of Central Excise and Service Tax.

Below are 12 FAQ's on Sabka Vishwas Legacy Dispute Resolution Scheme:

1. What is effective date of this scheme

Effective date of this scheme will be notified once the scheme is approved by Parliament.

2. Who shall be eligible to opt for the scheme

The proposed Scheme covers past disputes of taxes which have got subsumed in GST namely Central Excise, Service Tax and Cesses.

All persons are eligible to avail the scheme except a few exclusions :

(a) who have filed an appeal before the appellate forum and such appeal has been heard finally 35 on or before the 30th day of June, 2019;

(b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration;

(c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019;

(d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;

(e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019;

(f) a person making a voluntary disclosure,

(i) after being subjected to any enquiry or investigation or audit; or

(ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it;

(g) who have filed an application in the Settlement Commission for settlement of a case;

(h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;

3. Which are the acts to which the scheme applies

The scheme applies to Following Acts

• the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or Chapter V of the Finance Act, 1994 and the rules made thereunder
• the Agricultural Produce Cess Act,1940;
• the Coffee Act, 1942;
• the Mica Mines Labour Welfare Fund Act, 1946;
• the Rubber Act, 1947;
• the Salt Cess Act, 1953;
• the Medicinal and Toilet Preparations (Excise Duties) Act, 1955;
• the Additional Duties of Excise (Goods of Special Importance) Act, 1957;
• the Mineral Products (Additional Duties of Excise and Customs) Act, 1958;
• the Sugar (Special Excise Duty) Act, 1959;
• the Textiles Committee Act, 1963;
• the Produce Cess Act, 1966;       
• the Limestone and Dolomite Mines Labour Welfare Fund Act, 1972;
• the Coal Mines (Conservation and Development) Act, 1974;
• the Oil Industry (Development) Act, 1974;
• the Tobacco Cess Act, 1975;
• the Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976;
• the Bidi Workers Welfare Cess Act, 1976;
• the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978;
• the Sugar Cess Act, 1982;
• the Jute Manufacturers Cess Act, 1983;
• the Agricultural and Processed Food Products Export Cess Act, 1985;
• the Spices Cess Act, 1986;
• the Finance Act, 2004;
• the Finance Act, 2007;
• the Finance Act, 2015;
• the Finance Act, 2016;
• any other Act, as the Central Government may, by notification in the Official Gazette, specify;

4. What are relief provided and Tax dues to be paid under this Act

Relief	Conditions
If the amount of duty is, (i)  rupees fifty lakhs or less, then, seventy per cent. of the tax dues; (ii)  more than rupees fifty lakhs, then, fifty per cent. of the tax dues;	Where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019.
100%	Where the tax dues are relatable to a show cause notice for late fee or penalty only, and the 10 amount of duty in the said notice has been paid or is nil.
If the amount of duty is, (i)  rupees fifty lakhs or less, then, sixty per cent. of the tax dues; (ii)  rupees fifty lakhs, then, forty per cent. of the tax dues;	Where the tax dues are relatable to an amount in arrears.
If the amount of duty is, (i)   rupees fifty lakhs or less, then, sixty per cent. of the tax dues; (ii)  amount indicated is more than rupees fifty lakhs, then, forty per cent. of the tax dues;	In a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it
If the amount of duty is, (i)     rupees fifty lakhs or less, then, seventy per cent. of the tax dues; (ii)     more than rupees fifty lakhs, then, fifty per cent. of the tax dues;	Where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th day of June, 2019
No Relief	Where the tax dues are payable on account of a voluntary disclosure by the declarant

5. What is the meaning of Tax Dues for the purpose of the scheme

For the purposes of the Scheme, tax dues means

• where
  • a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum, the total amount of duty which is being disputed in the said appeal;
  • more than one appeal arising out of an order, one by the declarant and the other being a departmental appeal, which are pending as on the 30th day of June, 2019 before the appellate forum, the sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty being disputed in the departmental appeal:

Provided that nothing contained in the above clauses shall be applicable where such an appeal has been heard finally on or before the 30th day of June, 2019

Illustration 1: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.1000 and amount of penalty of Rs.100. The declarant files an appeal against this order. The amount of duty which is being disputed is Rs.1000 and hence the tax dues are Rs.1000.

Illustration 2: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.900 and penalty of Rs.90. The declarant files an appeal against this order. The amount of duty which is being disputed is Rs.900 and hence tax dues are Rs.900.

Illustration 3: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.900 and penalty of Rs 90. The declarant files an appeal against this order of determination. The departmental appeal is for an amount of duty of Rs.100 and penalty of Rs.10. The amount of duty which is being disputed is Rs.900 plus Rs.100 i.e Rs.1000 and hence tax dues are Rs.1000.

Illustration 4: The show cause notice to a declarant was for an amount of duty of Rs.1000. The order was for an amount of duty of Rs.1000. The declarant files an appeal against this order of determination. The first appellate authority reduced the amount of duty to Rs.900. The declarant files a second appeal. The amount of duty which is being disputed is Rs.900 and hence tax dues are Rs.900;

6. What is the procedure to file declaration under the scheme

• The Declaration shall be filed electronically.

• The designated committee shall verify the correctness of the declaration.

• Where the amount estimated to be payable by the declarant, as estimated by the designated Issue of committee, equals the amount declared by the declarant, then, the designated committee shall issue statement by in electronic form, a statement, indicating the amount payable by the declarant, within a period of sixty designated days from the date of receipt of the said declaration.

• Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimate of the amount payable by the declarant within thirty days of the date of receipt of the declaration.

7. Whether the declarant can adjust any pre deposit made before filing appeal

Any amount paid as predeposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be can be adjusted before filing appeal.

Provided that if the amount of predeposit or deposit already paid by the declarant exceeds the amount payable by the declarant, he shall not be entitled to any refund.

8. Whether any interest or penalty is payable on dues declared

No, the declarant shall not be liable to pay interest or penalty on dues declared.

9. Whether the declarant shall be liable for prosecution in respect of the dues

No, the declarant shall not be liable for prosecution.

10. Can we use Input Tax Credit to pay off dues under this scheme

No we cannot use input tax credit to pay off dues under this scheme.

11. Can we get refund of Amount paid under this scheme

No we cannot get refund of Amount paid under this scheme.

12. Whether recipient can take Input Tax Credit of tax paid

No ITC can be taken for tax paid under the scheme.

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information

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