In the Union Budget 2019-20, the Hon’ble Finance Minister announced the ‘Sabka Vishwas-Legacy Dispute Resolution Scheme, 2019‘. The Scheme has now been notified and will be operationalized from 1st September 2019. The Scheme would continue till 31st December 2019.
CONCEPT GIVEN UNDER THE SCHEME
Government expects the Scheme to be availed by large number of taxpayers for closing their pending litigations relating to Service Tax and Central Excise cases.
The Scheme is especially tailored to free the large number of taxpayers of their pending litigation with the tax administration. Government urges the taxpayer’s to avail the benefit of SabkaVishwas – Legacy Dispute Resolution Scheme, 2019 and make a new beginning.
VARIOUS IMPORTANT CONCEPTS UNDER THE SCHEME
The scheme gives various important definitions in order to understand its framework and important concepts which are defined under the scheme areas mentioned below amount in arrears, Declarant, Order, Order in appeal, Tax dues, Relief of Tax dues etc.
ELIGIBILITY CRITERIA OF THE SCHEME
Under Section 125 of Finance Act, 2019 all the persons are eligible to file the declaration under the Scheme. However, the following is the list of exception, i.e., the following persons cannot opt for the Scheme:
1. Under 125(1)(a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019;
2. Under 125(1)(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;
3. Under 125(1)( (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;
4. Under 125(1) (d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;
Our View-When any SCN is issued for refund or erroneous refund in that scenario the benefits cannot be availed however when a SCN is issued for interest or penalty of refund then there is not restriction to file a declaration to avail the benefit under this scheme.
5. Under 125(1) (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;
6. Under 125(1) (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;
7. Under 125(1) (g) who have filed an application in the Settlement Commission for settlement of a case;
8. Under 125(1) (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;
When a declaration is made under IV schedule the Central Excise Act, 1944; where a list of goods are given for which the scheme cannot be availed.
Filing of Declaration:
Further in terms of Section 125(2)a declaration under sub-section (1) shall be made in such electronic form as may be prescribed
The declaration under the scheme has to made online on the website electronically at https://cbic-gst.gov.in in Form SVLDRS-1 by the declarant, on or before the 31st December,2019.
RELIEF AVAILABLE UNDER THE SCHEME
Cases where the tax dues relate to a show cause notice or an appeal which are pending as on 30th June 2019 and cases where the tax dues are linked to an investigation or audit or an inquiry against the declarant and the amount is quantified on or before 30th June 2019.
|Sr. No.||Particulars||Where tax payable is less than Rs.50 Lacs||Where tax payable is more than Rs.50 Lacs||Interest and Penalty payable|
|1||Tax dues at SCN stage||30%||50%||NIL|
|2||Tax dues at appeal stage||30%||50%||NIL|
|3||Tax dues outstanding OIO/ OIA stage where appeal is not filed||40%||60%||NIL|
|4||Tax dues which are linked to enquiry, investigation or audit–amount being quantified before 30th June 2019||30%||50%||NIL|
|5||Tax dues at SCN stage with respect to penalties, late fees–where the amount of duty is Nil or has been paid||0%||0%||NIL|
To avail the benefit under this scheme one has to file declaration however Section 125(1)(f)(ii) restrict to file declaration by the person having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it however there is a relief available in terms of 124(1)(c)(iii) for the said liability indicated in return filed. These two provisions are contradictory to each other and need to be addressed in time to come.
So this scheme is a welcome step for disposal of pending liquidation of Central excise and service tax mattersbut again the conditions to avail the benefits under this scheme are ambiguous which needs to be clarify to achieve the object of said scheme.
For More details you may follow below link
For SABKA VISHWAS Rules
For SABKA VISHWAS Scheme Applicability Notification
Abhishek Chopra is practicing in CA in the field of indirect taxation and specializes in strategy, planning, advisory and compliance in the field of Indirect tax. You may reach to us – [email protected]
Rashmi Jain who is practicing Advocate in the corporate law provides the service in planning advisory and compliances. You may reach to us –[email protected]