A dispute resolution cum amnesty scheme called ‘the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019‘ has been introduced for resolution and settlement of legacy cases of Central Excise and Service Tax. 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 including as those convicted under the act in the case for which he intends to make declaration and those who have filed an application before the Settlement Commission. Given below are details on the scheme:

1. From when the scheme shall be effective?

The effective date of the scheme is not yet notified.

2. Who shall be eligible to opt for the scheme?

All persons are eligible to opt for the scheme. Except the below:

  • 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;
  • who have been convicted for any offence punishable for the matter for which he intends to file a declaration;
  • who have been issued a show cause notice and the final hearing has taken place on or before the 30th day of June, 2019;
  • who have been issued a show cause notice for an erroneous refund or refund;
  • 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;
  • a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit; or
  • a person making a voluntary disclosure after having filed a return wherein he has indicated an amount of duty as payable, but has not paid it;
  • who have filed an application in the Settlement Commission for settlement of a case;
  • 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 enactments (all of which have subsumed in GST):

  • 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;
  • 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 is the relief under the Act? 

Relief Eligible dues
(a) Total tax due is more than 50 Lakhs, relief of 50% of tax dues

(b) Total tax due is less than 50 Lakhs, relief of 70% of tax dues.

(a) 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

(b) where the tax dues are linked to an enquiry, investigation or audit against the declarant

(a) Total tax due is more than 50 Lakhs, relief of 40% of tax dues

(b) Total tax due is less than 50 Lakhs, relief of 60% of tax dues.

(a) where the tax dues are relatable to an amount in arrears in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amount indicated
Entire amount where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil
No relief Voluntary Disclosure

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

 “Tax dues” means—

Type Tax Due
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
Where 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.
Where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30th day of June, 2019 The amount of duty stated to be payable by the declarant in the said notice:
Where an enquiry or investigation or audit is pending against the declarant The amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30th day of June, 2019
Where the amount has been voluntarily disclosed by the declarant, The total amount of duty stated in the declaration
Where an amount in arrears relating to the declarant is due The amount in arrears

6. Whether any interest or penalty is payable?

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

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

 No, the declarant shall not be liable for prosecution.

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

 Yes, the declarant can adjust any pre deposit made. However if the pre deposit is more than the amount due under the scheme, no refund shall be provided.

9. What is the procedure to file declaration under the scheme?

(a) Declaration shall be made in electronic form (form is not yet prescribed)

(b) Declaration shall be verified by designated committee except in case of voluntary disclosure.

(c) If the amount estimated by the committee is equal to the declaration then statement shall be issued within 60 days. (If the amount estimated by the committee is higher than the declaration then estimated statement shall be issued within 30 days and the declarant shall be given an opportunity of being heard before issue of final statement).

(d) Declarant has to pay electronically through internet banking amount payable as indicated in the statement issued by the designated committee, within 30 days from date of issue of such statement

10. What is the final stage of the scheme?

Designated committee shall issue a discharge certificate in electronic form, within 30 days of said payment and submission of proof of with drawal of appeal, Discharge Certificate shall be conclusive to the matter and time period.

Any appeal or reference or a reply to the show cause notice against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court shall be deemed to be withdrawn.

In case of any writ petition or appeal or reference before the High Court or Supreme Court, the declarant shall file an application for withdrawal.

11. Can a Show Cause Notice be issued for any other matters for the said period (or) for the same matter for a subsequent period?

Discharge Certificate shall be conclusive to the matter and time period. Show Cause Notice can be issued for subsequent period or for any other matter in the same period.

12. Can I use balance in Input Tax Credit for making payment?

No, the payment has to be made in cash.

13. Whether recipient can take Input Tax Credit of tax paid?

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

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