Article explains Eligibility for Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (LDRS) and amount of Tax, Interest and Penalty payable.

Sl. No Situation 1 Situation 2 (to be read with Situation 1) Eligible for LDRS (Yes or No) Category % of Amount of Duty payable (See Note1 below the table) Relevant clause (s) in Finance Bill 2019
(a) (b) (c) (d) (e ) (f) (g)
1 Filed an appeal before the appellate forum Heard finally on or before  30.06.2019 No 124-(1)(a)
2 Not heard finally on or before  30.06.2019 Yes Tax Dues Upto 50 lakhs: 30% ;

Above 50 lakhs: 50%

124(1) and 123-(1)(a)
3 Convicted for any offence in respect of  the subject dues No 124-(1)(b)
4 Issued a show cause notice Heard finally on or before  30.06.2019 No 124-(1)(c)
5 Not heard finally on or before 30.06.2019 Yes Tax Dues Upto 50 lakhs: 30% ;

Above 50 lakhs: 50%

124(1) and 123-(1)(a)
6 Show cause notice issued for erroneous refund or refund No 124-(1)(d)
7 Subjected to an Enquiry Or Investigation Or Audit Amount Of Duty involved Not Quantified on or before 30.06.2019 No 124-(1)(e)
8 Amount OF Duty involved has been Quantified on or before 30.06.2019 Yes Tax Dues Upto 50 lakhs: 30% ;

Above 50 lakhs: 50%

124(1) and 123-(1)(c)
9 Person making a voluntary disclosure Subjected to any Enquiry OR Investigation or Audit No 124-(1)(f)(i)
10 Person making a voluntary disclosure Understand-ably on his own i.e., before initiation of Enquiry OR Investigation or Audit by Dept Yes Tax Dues 100% (Note2) 124(1) and 123-(1)(e)
11 SCN issued Filed an application in the Settlement Commission No 124-(1)(g)
12 With respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 No 124-(1)(h)
13 No appeal filed against order with in the due date Yes Amount In Arrears Upto 50 lakhs: 40% ;

Above 50 lakhs: 60%

124 (1) , 120 (c) and 123-(1)(c)
14 Appeal relating to the declarant attained finality in confirmation of demand Yes
15 Filed a return on or before 30.06.2019 indicated an Amount Of Duty as payable, but has not paid it Yes
16 Only penalty or late fee is under dispute Yes Tax Dues Nil 123-(1)(b)

*Words in UPPERCASE and also UNDERLINED are defined words

Note1: (a) THE DECLARANT SHALL NOT BE LIABLE TO PAY ANYFURTHER DUTY, INTEREST, OR PENALTY AND ALSO SHALL NOT LIABLE FOR PROSECUTION,WITH RESPECT TO THE MATTER AND TIME PERIOD COVERED IN THE DECLARATION.

(b) Pre-deposit amount would be deducted from the amount payable. If PD is more than amount payable, no refund of excess amount. Further, ITC would not be allowed to the amount payable and amount paid would not be allowed as ITC to the recipient.

(c) Tax dues shall be determined as per Clause 122 of Finance Bill 2019 (illustrations also given there)

(d) Amount would be estimated by Designated Committee in terms of clause 126. If such estimated demand is more than that of mentioned in the declaration, such additional amount would be determined following Principles of natural justice. If it is equal to the amount declared by the declarant, it would be accepted.

Note2: Designated Committee would not verify the correctness of declaration in Voluntary disclosure. However, 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 instituted.

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6 Comments

  1. SRIRAMACHANDRA MURTHY KASYAPA says:

    ST ASSESSEE PAID SERVICE TAX FULLY AFTER 1 YEAR. HIS CONSULTANT CA SWALLOWED THE MONEY COLLECTED FROM HIM FOR PAYING SERVICE TAX. CA DID NOT FILE THE RETURNS ALSO. CAN IT BE SAID THAT THE AMOUNT PAID IS ARREARS ?

  2. Mohammed Ebrahim Contractor says:

    Dear Sir,
    The Order in Appeal has been passed by the Commissioner (Appeals) 10 years back and the appeal hasnt been filed against the above order in tribunal. Can we take the benefit of the scheme in relation to points no.13 and 14?

  3. C.Mallikarjun Reddy says:

    The case where SCN was issued and final PH conducted on or before 30.06.2019 it is excluded from scheme vide clause 124(1)(c). In case SCN issued but final PH is not conducted on or before 30.06.2019 it is not barred from scheme. But in case where SCN issued and OIO passed as on 30.06.2019 but appeal not filed as on 30.06.2019 as appeal period is not over, whether it is covered in the scheme? is the doubt. In that case also final PH is conducted on or before 30.06.2019 as Order is issued on or before 30.06.2019 thereby not eligible. Seems such an interpretation make provisions like clauses 123(1)(c), 122(e), 120(c)(i) otiose. Seems 124(1)(c) is loosely worded. Since due date to file appeal is not over we can’t even call it as amount of arrears as per clause 120(c)(i). What is the rationality in making FINAL HEARING is the criteria in those cases instead of passing of the order. Hope some rectification takes place in due course before bill becomes Act.

  4. CA DEEPAK SONI says:

    THE SCHEME AS USUAL IS DOWNED WITH MANY CAVEATS AND SEVERAL OF THEM ARE INCOMPREHENSIBLE AND ARE DEVOID OF LOGIC. I DO NOT KNOW WHY A PERSON WHO HAS BEEN MADE SUBJECT TO AUDIT OR INQUIRY IS NOT ELIGIBLE WHEN A PERSON IN WHOSE CASE DEMAND HAS BEEN RAISED IS ELIGIBLE. AND WHAT IS MEANING OF MADE SUBJECT TO AUDIT OR ENQUIRY ?IT APPEARS THAT EVEN A CASUAL NOTICE ISSUED UPON A TAX PAYERS MAKES HIM SUBJECT TO INQUIRY OR AUDIT AND MAKES HIM INELIGIBLE FOR THE AMNESTY.

    1. C.Mallikarjun Reddy says:

      Yes sir … Hope certain provisions would be refined if professional bodies like ICAI and Trade associations like FICCI put forth proper proposals. Kindly see that Words “AUDIT” and “ENQUIRY or INVESTIGATION” are defined words.

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