Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

Opens on : 01.09.2019

Closes on : 31.12.2019

I. Applicability:

Disputes, Arrears and amounts payable under Central Excise Act & Ch.V of FA,1994 (Service Tax) and other Acts as detailed in Section 122.

II. Authority:

a) Sections 120 to 135 of the FA, 2019. {Mentioned as Sections}

b) SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME RULES, 2019 (in short ‘Rules’) notified vide Notfn No. 5/2019-CE(NT) dated 21.08.2019 (w.e.f 01.09.2019) {Mentioned as Rules}

c) Circular No. 1071/4/2019-CX.8 dated 27.08.2019 {Mentioned as Circular}

II (A) Definitions:

The following words/phrases used in the provisions are defined vide section 121:

(i) “AMOUNT DECLARED”  {Sec 121(a)}

(ii) “AMOUNT ESTIMATED{Sec 121(b)}

(iii) “AMOUNT IN ARREARS{Sec 121(c)}

(iv) “AMOUNT OF DUTY”  {Sec 121(d)}

(v) “AMOUNT PAYABLE{Sec 121(e)}

(vi) “APPELLATE FORUM{Sec 121(f)}

(vii) “AUDIT{Sec 121(g)}

(viii) “DECLARANT{Sec 121(h)}

(ix) “DECLARATION{Sec 121(i)}

(x) “DEPARTMENTAL APPEAL{Sec 121(j)}

(xi) “DESIGNATED COMMITTEE{Sec 121(k)}

(xii) “DISCHARGE CERTIFICATE{Sec 121(l)}

(xiii) ‘‘ENQUIRY OR INVESTIGATION’’ {Sec 121(m)}

(xiv) “INDIRECT TAX ENACTMENT{Sec 121(n)}

(xv) “ORDER{Sec 121(o)}

(xvi) “ORDER IN APPEAL{Sec 121(p)}

(xvii) “PERSON{Sec 121(q)}

(xviii) ‘‘QUANTIFIED{Sec 121(r)}

(xix) “STATEMENT{Sec 121(s)}

(xx) “TAX RELIEF{Sec 121(t)}

(xxi) All other words as defined/meaning assigned to them under Indirect Tax enactment as long as not in conflict with the provisions of this scheme

{Sec 121(u)}

III. Cases Covered/eligible for the scheme:

All the cases which are specifically not excluded as detailed at Sl.No. IV below {See Section 125(1)}, illustrative list of eligible cases are as mentioned below:

(i) APPEAL FILED but NOT HEARD FINALLY on or before 30.06.2019 {Sec 125(1) r/w Sec 125(1)(a)}.

(ii) NOT CONVICTED for any offence for the matter for which declaration intends to be filed { Sec 125(1) r/w Sec 125(1)(b)}

(iii) SCN ISSUED and FINAL HEARING NOT TAKEN PLACE on or before 30.06.2019 { Sec 125(1) r/w Sec 125(1)(c)}

(iv) ENQUIRY OR INVESTIGATION OR AUDIT initiated but amount of duty QUANTIFIED on or before 30.06.2019 { Sec 125(1) r/w Sec 125(1)(e), Sec 121(m), Sec 121(g)}

(v) Cases falling under AMOUNT IN ARREARS category as defined at Section 121, such as (a) cases where no appeal filed against the Demand ORDER (OIO) with in due date thereby rendering tax dues recoverable; (b) cases where ORDER IN APPEAL (OIA/Final order etc.,) attained finality rendering tax dues recoverable; (c) cases where Return filed indicating AMOUNT OF DUTY as payable but not paid. {Sections 125(1)(f)(ii)  read with Sec 124(1)(c)}

(vi) Any other case specifically not excluded in Section 125(1) as discussed in Sl.No. IV below:

IV. (A) Cases Excluded/Restricted under the Scheme-as detailed at Section 125(1):

(i) APPEAL FILED BUT HEARD FINALLY on or before 30.06.2019 {Sec 125(1)(a)}.

(ii) CONVICTED for any offence for the matter for which declaration intends to be filed {Sec 125(1)(b)}

(iii) SCN ISSUED and FINAL HEARING TAKEN PLACE on or before 30.06.2019 {Sec 125(1)(c)}

(iv) SCN issued for Erroneous Refund or Refund {Sec 125(1)(d)}

(v) ENQUIRY OR INVESTIGATION OR AUDIT initiated but AMOUNT OF DUTY not QUANTIFIED on or before 30.06.2019 {Sec 125(1)(e)}

(vi) Subjected to ENQUIRY OR INVESTIGATION OR AUDIT however duty not QUANTIFIED on or before are not eligible under Voluntary Disclosure category also {Sec 125(1)(f)(i)}

(vii) Return filed indicating amount of duty as payable but not paid, do not fall under Voluntary Disclosure category { Sec 125(1)(f)(ii)}. But the same would be covered under AMOUNT IN ARREARS Category {Sec 121(c)(iii) read with Sec 124(1)(c)}

(viii) Application filed in the Hon’ble Settlement Commission {Sec 125(1)(g)}. {See IV(B)(iv) hereunder}

(ix) Cases in respect of excisable goods in Fourth Schedule to the Central Excise Act, 1944 such as Tobacco & Petroleum Products etc {Sec 125(1)(h)}.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

(B)  As per Clarification dated 27.08.2019 the following eligibilities /restrictions are clarified:

(i) PERSON can opt for the scheme in respect of the issues other than those mentioned at clauses (a) to (e) and (g) of Section 125(1) as ineligible, if they are otherwise eligible {Para 10(b) of the circular dated 27.08.2019}.

(ii) The provisions apply to any show cause notice for penalty/late fee (with Tax demand or otherwise) irrespective of the fact that it is under adjudication or appeal {Para 10(d) of the circular dated 27.08.2019}

(iii) Restriction will not apply to those cases hearings in matters are typically rescheduled even after the final hearing due to new bench, change in officer or any other reason and those cases would not be considered as cases in which FINAL HEARING IS OVER. {Para 10(e) of the circular dated 27.08.2019}

(iv) Section 125(g) excludes only the cases where an application has been filed before the Settlement Commission for settlement and pending for disposal. Cases of rejected, confirmed, appealed etc are covered under the scheme under relevant category {Para 10(f) of the circular dated 27.08.2019}

(v) For the purpose of Sec 121(r), ‘WRITTEN COMMUNICATION’ will include a letter intimating duty demand payable or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc. {Para 10(g) and Para 4(a) of the circular dated 27.08.2019}

(vi) The DECLARANT has to file a DECLARATION for all the matters concerning duty liability covered under the show cause notice but can’t avail scheme for selected matters relating to the subject SCN {Para 10(h) of the circular dated 27.08.2019}

(vii) In case of a show cause notice demanding duty/tax from main taxpayer and proposing penal action against co-noticees, it is clarified that the co-noticees can’t avail the benefits of the scheme till such time the duty demand is not settled/discharged by the main noticee. {Para 10(i) of the circular dated 27.08.2019}

(viii) In cases of confirmed duty demand where there is no appeal pending the TAX RELIEF is as applicable to AMOUNT IN ARREARS cases {Para 4(b) of the circular dated 27.08.2019}

V. (A) TAX RELIEF under AMOUNT PAYABLE under the scheme:

SL. No Category

TAX RELIEF

(in addition to the waiver of Interest, penalty and prosecution)

TAX DUES (calculated u/s 123) are Rs. 50 Lakhs or Less TAX DUES (calculated u/s 123)  are More than 50 Lakhs
1 TAX DUES relatable to SCN or appeals thereof pending as on 30.06.2019

 { Sec 124(1)(a)}

70%

(30% of Duty/ Tax to be paid)

50%

(50% of Duty/ Tax to be paid)

2 ENQUIRY OR INVESTIGATION OR AUDIT initiated and amount QUANTIFIED as on 30.06.2019

{ Sec 124(1)(d)}

3 Cases falling under the category of AMOUNT IN ARREARS as defined at Sec 121(c)

{ Sec 124(1)(c)}

60%

(40% of Duty/ Tax to be paid)

40%

(60% of Duty/ Tax to be paid)

4 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

{ Sec 124(1)(b)}

Entire Fee or Penalty (No amount is to be paid )
5 Cases falling under Voluntary Disclosure

{ Sec 124(1)(e)}

No Relief in TAX DUES.

Only Waiver of Interest & Penalty (Total AMOUNT OF DUTY to be paid)

(B) How to calculate TAX DUES:

Sl. No Situation : What is Tax dues? Relevant provision
1 Single appeal arising out of an order is pending and not heard finally as on 30.06.2019 :

The total AMOUNT OF DUTY which is being disputed in the said appeal;

Sec 123(a)(i)
2 If both party appeal and Dept appeal, which are against same order,  are pending and not heard finally as on 30.06.2019 : Sum of the AMOUNT OF DUTY disputed in both the appeals

(For Sl.No. 1 and 2 , Illustrations 1 to 4 given under Sec 123(a) to be seen)

Sec 123(a)(ii)
3 If SCN is pending and not heard finally as on 30.06.2019   AMOUNT OF DUTY stated to be payable in the said notice Sec 123(b)
4 ENQUIRY OR INVESTIGATION or AUDIT is pending and amount QUANTIFIED, as on 30.06.2019   AMOUNT OF DUTY payable so QUANTIFIED Sec 123(c) (proviso also to be seen)
5 Voluntary disclosure cases   AMOUNT OF DUTY stated in the DECLARATION Sec 123(d)
6 AMOUNT IN ARREARS cases   The AMOUNT IN ARREARS Sec 123(e)

Note: AMOUNT OF DUTY includes Cenvat credit { Paras 5(i) and 5(ii) of the Circular dated 27.08.2019}

(C) Treatment of Pre-deposits:

(i) Any amount of pre-deposit or deposit made shall be adjusted towards the AMOUNT PAYABLE under the scheme {Section 124(2)} even if such deposits are made through ITC {Para 10(c) of the Circular dated 27.08.2019}

(ii) No refund in case of pre-deposit or deposit made is more than the AMOUNT PAYABLE under the scheme {Sections 124(2) and 130(2)}

VI. Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019:-

 In terms of Section 132 ,  SABKA  VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME RULES, 2019 (in short ‘Rules’) have been notified vide Notfn No. 5/2019-CE(NT) dated 21.08.2019 (w.e.f 01.09.2019). Forms and procedure specified vide said Rules.

VII. Due Dates and time limits for processing the declarations:-

(i) Online DECLARATION in the form SVLDRS-1 to be filed during the period from 09.2019 to 31.12.2019 through https://cbic-gst.gov.in {Rule 3 r/w Sec 125}. The DECLARANT has to file a DECLARATION for all the matters concerning duty liability covered under the show cause notice but not only on selective matters of SCN {Para 10(h) of the circular dated 27.08.2019}

(ii) AMOUNT PAYABLE, if any, would be intimated to the DECLARANT electronically, vide STATEMENT in Form SVLDRS-3 within 60 (SIXTY) days from the date of receipt of DECLARATION {Rule 6 r/w Sec 127}. The DESIGNATED COMMITTEE may within 30 (THIRTY) days from issuance of SVLDRS-3, modify it to correct an arithmetical error or clerical error, which is apparent on the face of record, on such error being pointed out by the DECLARANT or suomotu {Sec 128}.

(iii) If AMOUNT PAYABLE is more than the amount calculated and declared as payable by the DECLARANT, a notice would be issued to him electronically, in SVLDRS-2 and after following principles of natural justice as discussed in Rules 6(3) to 6(5), the amount payable would be intimated electronically in form SVLDRS-3. No scrutiny of DECLARATION filed under the Voluntary disclosure {proviso to Sec 126(1)} however if any material mistake is found in such DECLARATION within 1 year of issue of DISCHARGE CERTIFICATE, action would be initiated under respective Acts as if no declaration is filed {proviso to Sec 129(2)(c)}.

(iv) The DECLARANT shall pay the amount as indicated in form SVLDRS-3, electronically, with in 30 (THIRTY) days from the date of issue of SVLDRS-3 {Rule 7}. The AMOUNT PAYABLE shall not be through ITC account {Sec 130(1)(a)}. If the DECLARANT does not pay the amount within the stipulated time, due to any reason, the DECLARATION will be treated as lapsed { Para 10(j) of the Circular dated 27.08.2019}

(v) On being satisfied that the payment is made and withdrawn the appeals pending before Hon’ble SC and HC {Rule 8 r/w Sec 127(7)}, DISCHARGE CERTIFICATE would be issued in form SVLDRS-4 within 30 (THIRTY) days of the said payment and submission of the said proof, whichever is later{Rule 9 r/w Sec 127(8)}. In case of appeals pending before C(A) and Hon’ble CESTAT the Scheme provides for deemed withdrawal of appeal(s){ Sec 127(6)}.

(vi) In cases where AMOUNT PAYABLE by the DECLARANT is NIL and therefore SVLDRS-3 is not issued, DISCHARGE CERTIFICATE in form SVLDRS-4 would be issued within 30 (THIRTY) days from the date of receipt of the DECLARATION {proviso to Rule 9}

(vii) The entire process of filing of DECLARATION to communication of Department’s decision and to payment gets completed within 90 days. This is important as there is no scope for extension of the time period for the sub-processes or the complete process { Para 7 of the Circular dated 27.08.2019}

VIII. Other Restrictions/conditions:

(i) Amount paid under this scheme shall not be REFUNDABLE under any circumstances.{Sec 130(1)(b)}

(ii) Amount paid under this scheme shall not be taken as ITC by anybody {Sec 130(1)(c)}

(iii) DISCHARGE CERTIFICATE issued under this Scheme will not be a basis for assuming that the Department has admitted the position {Sec 129(2)(a) read with Para 10(a) of the Circular dated 27.08.2019}. Similarly, DECLARATION by the DECLARANT will not be a basis for assuming that the DECLARANT has admitted the position {Para 10(a) of the Circular dated 27.08.2019}

(iv) Every DISCHARGE CERTIFICATE shall be conclusive as to the matter and time period stated therein with regard to the duty/interest/penalty and also grants immunity from prosection. { Sec 129(1) r/w Para 8 of the Circular dated 27.08.2019}

(v) No matter and time period covered under a DISCHARGE CERTIFICATE shall be reopened in any other proceedings under the subject INDIRECT TAX ENACTMENTS except in respect of the voluntary disclosure category that too would be only in the event of any material particular in the DECLARATION is found to be false { Sec 129(2) r/w Para 8 of the Circular dated 27.08.2019}

(vi) Section 133 provided power to CBIC to issue any orders, instructions and directions for the proper administration of this Scheme which are binding on the persons employed in the execution of the Scheme

(vii) Section 134 provides power to the Central Government to issue any order for removal of difficulties if any, in implementation of the scheme within 2 years from 01.09.2019.

(viii) As per section 131, nothing contained in this Scheme shall be construed as conferring any benefit, concession or immunity on the DECLARANT in any proceedings other than those in relation to the matter and time period to which the DECLARATION has been made.

Note: Provisions mentioned above may please be seen for full details and proper understanding of the scheme.

Request: Any corrections/improvements may be informed personally to me through Whatsapp /email. (Views/contents of this are my personal shall not be considered as of the department)

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2 Comments

  1. mani says:

    sir,
    while applying in svldr scheme, for a particular half yearly – service tax due the amount entered in the portal by us is wrong, how to correct that, can we give a written letter to department or how to correct it online/offline before making the payment?

  2. arjun1969 says:

    In IV(B)(v)… the words “…letter intimating AMOUNT OF DUTY payable…” may please be read as “….. letter intimating duty demand…..”
    thanks
    Mallikarjun Reddy

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