1. Purpose of the Gujarat Tax Amnesty Scheme, 2019

More than 20,000 cases are pending at various levels under the laws sought to be covered under the scheme. Hence a need was felt to ensure the recovery of the tax, grant relief to the trade and reduce the cost of administration. Therefore the present scheme has been formulated with the said objectives. Relief by way of remission is granted of the interest and penalty as discussed hereinafter. Hence no relief is granted under the Gujarat Tax Amnesty Scheme, 2019 for the tax amount (except adjustment of the pre-deposit amount subject to certain restrictions).

2. Resolution for the Gujarat Tax Amnesty Scheme, 2019

Scheme has been notified vide resolution no. GST-102019-2006-Th dt. 11.09.2019.

3. Nature of the Gujarat Tax Amnesty Scheme, 2019

The scheme in question is a remission scheme. Hence an order granting remission from tax (to the extent of predeposit subject to certain restrictions discussed later), interest and penalty as against the dues recoverable shall be passed.

4. Dues under the following Acts are covered by Gujarat Tax Amnesty Scheme, 2019

a) The Gujarat Sales Tax Act, 1969

b) The Gujarat Value Added Tax Act, 2003

c) Central Sales Tax Act, 1956

d) The Gujarat Tax on Entry of specified goods into local areas Act, 2001

e) The Bombay Sales of Motor Spirits Taxation Act, 1958

f) The Gujarat Purchase Tax on Sugar cane Act, 1989

5. Cut-off date for the Gujarat Tax Amnesty Scheme, 2019

Cut-off date for the scheme shall be 30.06.2017. Hence dues arising pursuant to audit assessment, re-assessment, revision, appeal, etc. (including voluntary disclosure) for the transactions undertaken by the said date shall be covered under the scheme. Hence dues emanating from all the transactions undertaken till 30.06.2017 (pre-GST period) are covered under the scheme.

However cut-off date shall be 31.03.2017 in cases where transitional credits have been taken under SGST Act or declaration forms are pending as on the said date as scrutiny is required for such cases. Hence dealers covered by said exception can make an application considering cut-off date as 31.03.2017 and not 30.06.2017. Thus in such cases dues emanating from transactions undertaken till 31.03.2017 shall be covered under the scheme.

6. Gujarat Tax Amnesty Scheme, 2019 not applicable in following scenarios

a) If aggregate dues (tax, interest & penalty) recoverable under all the given laws for all the past years is Rs 100 crores or more.

b) Cases of bogus billing (invoices issued without actual movement of goods) where tax paid has been confiscated and/or cases where penalty equal to the tax amount has been imposed.

c) Firms of the fugitive criminals declared under the Extradition Act, 1962.

d) Cases where only penalty has been imposed.

7. Remission from tax, interest and penalty shall be as under:

Type of dealer Remission from tax Remission from interest Remission from penalty Other conditions
Regular dealer

 

No remission granted for the tax amount (subject to adjustment of predeposit as discussed in the illustration below the table). Entire interest remitted. Entire penalty remitted. Partial tax paid earlier before the implementation of the scheme shall be deducted (by way of remission) from the tax payable provided such deduction would be restricted to 50% of the tax payable under the scheme (see the illustration below the table).
Enforcement proceedings or proceedings where penalty has been imposed u/s 34(7) No remission granted for the tax amount (subject to adjustment of predeposit as discussed in the illustration below the table). Interest to be paid to the extent of 20% of the interest payable provided the said amount should not exceed 50% of tax payable. Balance amount of interest shall be remitted. Entire penalty remitted. Partial tax paid earlier before the implementation of the scheme shall be deducted (by way of remission) from the tax payable provided such deduction would be restricted to 25% of the tax payable under the scheme (see the illustration below the table).
Cases involving Entry tax and Motor Spirits tax

 

No remission granted for the tax amount. 20% of the penalty amount under Entry tax or 20% of the amount imposed u/s 5(3) of Motor Spirits Act to be paid.  Balance amount (80%) will be remitted.

8. Illustration of the remission to be granted under the Gujarat Tax Amnesty Scheme, 2019

Tax dues Rs. 1,00,000/-
Interest Rs.   72,000/-
Penalty Rs. 1,50,000/-
Total dues Rs. 3,22,000/-
Amount of predeposit paid before the date of the scheme Rs. 60,000/-

Now as per the scheme the amount of pre-deposit paid earlier is to be first adjusted against interest, thereafter penalty and then tax for computing the outstanding dues to be considered for remission.

a) Remission of interest

In the given case hence the predeposit of Rs. 60,000/- to be adjusted against the interest liability of Rs. 72,000/- first. Hence the balance interest payable would be of Rs. 12,000/-. Remission shall be as under:

I. Regular dealer category: Full interest amount of Rs. 12,000/- will be remitted.

II. Enforcement/penalty u/s 34(7) category: Interest to be paid to the extent of 20% of the interest payable provided the said amount should not exceed 50% of tax payable. Balance amount of interest shall be remitted. Hence in the given case, 20% of Rs. 12,000/- would be Rs. 2,400/-. As the said amount does not exceed 50% of the tax payable, Rs. 2,400/- is to be paid. Balance amount of interest (Rs. 12,000 – Rs. 2,400) of Rs. 9,600/- shall be remitted. Said working is based on the interpretation that 20% should be applied on interest payable (after the adjustment of the predeposit). If an alternate interpretation is considered of considering the interest payable as Rs. 72,000 (before the adjustment of predeposit), the interest payable under the scheme would be Rs. 14,400/-.We favour the former interpretation based on the language of the scheme.

b) Remission of penalty

I. Regular dealer category: If the penalty imposed of Rs. 1,50,000/- is u/s 34(12) of the GVAT Act, 2003 the case would be covered under the category of regular dealer above. Hence the entire amount of penalty of Rs. 1,50,000/- would be remitted.

II. Enforcement/penalty u/s 34(7) category: If the penalty imposed of Rs. 1,50,000/- is u/s 34(7) of the GVAT Act, 2003, the case would not be covered under the category of regular dealer. However even under the enforcement case/penalty u/s 34(7) category, entire penalty is also remitted. Hence here also entire amount of Rs. 1,50,000/- would be remitted.

c) Remission of the tax amount

As per the order, Rs. 1,00,000/- of tax amount is payable. No remission is granted for such amount. However additional remission by way of an adjustment of the predeposit of Rs. 60,000/- shall be granted as under:

I. Regular dealer: If the case is not of enforcement/imposition of penalty u/s 34(7), the predeposit of Rs. 60,000/- can be adjusted (by way of remission) only upto 50% of tax payable. As tax payable is Rs. 1,00,000/-, predeposit of Rs. 60,000/- can be adjusted only upto Rs. 50,000/- (50% of Rs, 1,00,000/-). Hence the said amount which can be adjusted shall be additionally remitted. Balance amount of tax of Rs. 50,000/- is to be paid under the scheme.

II. Enforcement/penalty u/s 34(7) category: If the case is of enforcement/imposition of penalty u/s 34(7), the predeposit of Rs. 60,000/- can be adjusted (by way of remission) only upto 25% of tax payable. As tax payable is Rs. 1,00,000/-, predeposit of Rs. 60,000/- can be adjusted only upto Rs. 25,000/- (25% of Rs, 1,00,000/-). Hence said amount which can be adjusted shall be additionally remitted. Balance amount of tax of Rs. 75,000/- to be paid under the scheme.

9. Dates for making the application under the Gujarat Tax Amnesty Scheme, 2019

Application under the scheme to be made between 15.09.2019 to 15.11.2019. After receipt of application, dealer shall be informed by the department of the pending dues by 30.11.2019 by way of a letter. Application to be made in the given form attaching the requisite order/notice for which dues are declared. Remission order to be passed under the scheme by the officer granting the benefit in terms of tax, interest and penalty. Due date for passing the remission order has not be prescribed.

10. Amount to be paid under the Gujarat Tax Amnesty Scheme, 2019

10% of the amount payable under the scheme to be paid as down payment by 15.01.2020. Balance 90% to be paid by way of 11 equal monthly installments starting from Feb 2020 to December 2020. Monthly installment to be paid before the end of the concerned month. Failure to pay the amount in time would result in denial of benefit under the scheme. Hence the amount paid till such failure will be adjusted from the dues as per the legal provisions.

11. Voluntary application

Voluntary application is also permitted under the scheme with the undertaking that the dealer would be liable for payment of dues not declared under the scheme as per the normal provisions. Remission to be granted in such cases would be that of a regular dealer category discussed in the table given earlier.

12. Cases where notice issued

Even cases where notice has been issued for assessment, reassessment or revision are covered under the scheme.

13. Appeal cases

Cases where appeals are pending are also covered under the scheme.

14. Issue wise application –Appeal cases

Issue wise application and withdrawal is also permitted. However for the same issue, application cannot be made for certain transactions and appeal be continued for the balance transactions. For example, if ITC has been denied (presuming to be on the same ground), it would not be possible to declare dues pertaining to only some of the invoices in respect of which ITC has been denied and continue to litigate on other invoices for which also ITC has been denied.

15. Application possible order-wise

Application under the scheme is not required to be mandatorily made for all the orders where the dues are pending. Hence it would be possible to make an application for only a particular assessment order and not all. However it would not be possible to declare partial dues recoverable out of a given order (except appeal cases as discussed above which permits matter wise application).

16. Departmental appeal

Cases where department has filed appeals before the Tribunal or the Court can also be covered under the scheme provided the demands disputed by the department are accepted in the application to be made under the scheme.

17. Adjustment of amount paid before the Gujarat Tax Amnesty Scheme, 2019

Amount paid before the date of the scheme shall be first adjusted against interest, thereafter penalty and then tax. Please see the illustration given earlier to understand the implications.

18. Other conditions

a) Refund shall not be granted under the scheme.

b) Appeal cannot be filed against the decisions taken by the authorities under the scheme.

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