The Sabka Vishwas Legacy Dispute Resolution Scheme announced by the Union government in its 2019-20 Budget will be operational from 1st September 2019 till 31st December 2019.
The scheme particularly focuses in closing all their pending disputes relating to legacy issues in service tax, central excise & several cesses which are now subsumed under GST & also providing Amnesty Scheme.
The Scheme is launched in the pretext of pending Rs 3.75 lac crores held up in litigation. Hence the Finance Minister thought of unlocking this money & provide Dispute Resolution & Amnesty Scheme.
Custom Duty & allied taxes like NCCD not covered in this scheme. Moreover, this is only for Indirect Taxes & not Direct Taxes.
As the objective of the scheme is to free a large segment of the taxpayers from the legacy taxes, the relief granted under is substantial.
The two main components of the scheme are dispute resolution and amnesty.
The dispute resolution component is aimed at liquidating the legacy cases of central excise and service tax that are subsumed in GST and are pending in litigation at various levels.
The amnesty component of the scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any Interest, Penalty, Late Fees or other consequence or prosecution under the law.
The most attractive aspect of the scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine & penalty. There is also a complete amnesty from prosecution.
For all the cases pending in adjudication or appeal this scheme offers a relief of 70% from the Tax demand if it is Rs 50 lakh or less and 50% if it is more than Rs 50 lakh.
The same relief is available for cases under investigation and audit where the duty involved is quantified and communicated to the party or admitted by him on or before June 30, 2019.
Further, in cases of confirmed Tax demand, where there is no appeal pending, the relief offered is 60% of the confirmed duty amount if the amount of Tax is Rs 50 lakh or less and it is 40%, if the confirmed Tax amount is more than Rs 50 lakh.
In cases of voluntary disclosure, the person availing the scheme will only have to pay the full amount of Tax with complete exemption from Interest, Penalty, late fees or prosecution.