Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019
1. Dispute Resolution cum Amnesty Scheme for legacy cases of Central Excise, Service Tax and Cess.
GST has just completed two years. An area that concerns me is that we have huge pending litigations from pre-GST regime. More than Rs. 3.75 lakh crore is blocked in litigations in service tax and excise. There is a need to unload this baggage and allow business to move on. I, therefore, propose, a Legacy Dispute Resolution Scheme that will allow quick closure of these litigations. I would urge the trade and business to avail this opportunity and be free from legacy litigations.
Nirmala Sitharaman ( Minister of Finance) Budget Speech
2. A dispute resolution cum amnesty scheme for resolution and settlement of legacy cases.
(i) covers past disputes of taxes which have got subsumed in GST namely Central Excise, Service Tax and Cesses.
3. The scheme to be available from a date to be notified.
4. Taxes/Cesses covered under the Scheme.
5. The Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or Chapter V of the Finance Act, 1994 and the rules made there under and
6. Twenty Six other Acts and Rules covered.
1. One time measure for liquidation of past disputes of central excise and service tax.
2. To provide an opportunity of voluntary disclosure to non-compliant taxpayers.
Cases covered under the Scheme
1. A show cause notice or Appeals arising out of a show cause notice pending as on the 30th June, 2019.
2. An amount in arrears.
3. An enquiry, investigation or audit where the amount is quantified on or before 30th June, 2019.
4. A voluntary disclosure.
Exclusions from the Scheme
1. Cases in respect of excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 (this includes tobacco and specified petroleum products; Ch.24-Tobacco; Ch.27-Coal).
2. Cases for which the taxpayer has been convicted under the Central Excise Act, 1944 or the Finance Act, 1944.
3. Cases involving erroneous refunds.
4. Cases pending before the Settlement Commission.
Any person falling under the following categories is eligible, subject to other conditions under the Scheme, to file a declaration :
(i) Who has a SCN for duty or one or more appeals arising out of such notice pending and where the final hearing has not taken place as on 30.06.2019.
(ii) Who has been issued SCN for penalty and late fee only and where the final hearing has not taken place as on 30.06.2019.
(iii) Who has recoverable arrears pending.
(iv) Who has cases under investigation and audit where the duty involved has been quantified and communicated to party or admitted by him in a statement on or before 30th June, 2019.
(v) Who want to make a voluntary disclosure.
Enquiry or investigation, under any of the indirect tax enactment, shall include the following actions, namely :
(i)search of premises;
(ii)issuance of summons;
(iii)Letters asking for production of accounts, documents or other evidence;
(iv)recording of statements.
I. Scope of tax relief covered under section 124(1) (b) with respect to SCN for late fee and penalty only where the amount of duty in the said notice has been paid or is NIL.
(i) The tax relief shall be the entire amount of late fee or penalty.
II. Cases of appeal before the appellate forum (Commissioner (Appeals) /CESTAT) where appeal has been heard finally on or before the 30th day of June, 2019.
(i) ‘No, the person will not be eligible.
III. Scope under the scheme when adjudication order determining the duty/tax liability is passed and received prior to 30.06.2019, but the appeal is filed on or after 01.07.2019.
(i) No, such a person shall not be eligible.
IV. Coverage of SCNs under the Scheme with respect to main noticee vis–vis co-notice: In case of a SCN issued to an assesse demanding duty and also proposing penal action against him as well as separate penal action against the co-noticee/s specified therein, if the main noticee has settled the tax dues, the co-noticee/s can opt for the scheme for the waiver of penalty.
V. Treatment of Pre-deposit : Any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted while issuing the statement indicating the amount payable by the declarant.
Benefits available under the Scheme
1. Total waiver of interest, penalty and fine in all cases Immunity from prosecution.
2. In cases pending in adjudication or appeal, a relief of 70% from the duty demand if it is 50 Lakh or less and 50%, if it is more than 50 Lakh. The same relief is available for cases under investigation and audit where the duty involved is quantified on or before 30th June, 2019.
3. In case of an amount in arrears, the relief is 60% of the confirmed duty amount if the same is 50 Lakh or less and it is 40% in other cases.
4. In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty.
5. Where the declarant has filed an appeal or reference or a reply to the SCN against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court, then, such appeal or reference or reply shall be deemed to have been withdrawn.
6. In case of a writ petition or appeal or reference before any High Court or the Supreme Court, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the Court, he shall furnish proof of such withdrawal to the Designated Committee.
7. No input tax credit for any amount paid under the Scheme can be taken.
8. The amount under the Scheme cannot be through the input tax credit account under the indirect tax enactment or any other Act.
9. In cases where pre-deposit or other deposit already paid exceeds the amount payable as indicated in the statement of the designated committee, the difference shall not be refunded.
9. Where any material particular furnished in the declaration is subsequently found to be false, within a period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be institute.