Taxation

Overview Of Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 In Central Excise

   -   July 7, 2019

A welcome move by the government to end past litigations and relieve unnecessary burden on taxpayers for prior indirect tax dues. This will ensure smoother transition to GST regime.

Ease of doing business in India was one of the main reform agenda of the NDA government in its previous tenure. Further, the budget 2019 of the NDA 2.0 government clearly reflects the government’s same obsession over World Bank’s ease of doing business ranking with the advent of various tax payer friendly reforms.

GST, being one of the key enablers for improving ease of doing business in India, it has become necessity to settle all the prior pending cases of erstwhile regime. Accordingly, Government has come up with Sabka Vikas Legacy Dispute Resolution Scheme (‘Scheme’) for early settlement of pending disputes of central excise and service tax. The scheme would put an end to litigations worth Rs. 3,75,000 crore.

Key highlights of the scheme are as follows:

1) As per the scheme, a person making declaration of tax dues under this scheme shall be provided a relief as follows:

(A) Where show cause notices were issued or appeals filed upto 30 June 2019:

  • Where tax dues are less than Rs. 50 lakhs: 70% of the tax dues 
  • Where tax dues are more than Rs. 50 lakhs: 50% of tax dues

(B) Where tax dues relates to amount payable asper declaration made earlier:

  • Where tax dues are less than Rs. 50 lakhs: 60% of the tax dues 
  • Where tax dues are more than Rs. 50 lakhs: 40% of tax dues

(C) Where amount linked to an enquiry, investigation or audit against a person has been quantified on or before 30 June 2019:

  • Where tax dues are less than Rs. 50 lakhs: 70% of the tax dues 
  • Where tax dues are more than Rs. 50 lakhs: 50% of tax dues

(D) Where voluntary disclosure is made by the declarant:

  • No relief where the tax dues are payable

 

2) Any amount declared shall not be paid through the input tax credit under indirect tax or any other Act. 

3) Such amount shall not be refundable and shall not be eligible to be availed as input tax credit.

4) Where any pre-deposit or other deposit already paid in relation to appeal or pending case and such amount exceeds the amount payable under declaration, then the difference of amount Paid and payable shall not be refunded.

5) A discharge certificate issued by the designated committee with respect to the amount payable under this Scheme and time period stated therein shall be conclusive and the declarant shall be relieved for any further duty, interest, or penalty or prosecution with respect to the matter and time period covered in the declaration.

6) Any matter which has been covered under such scheme shall not be reopened in any other proceeding under the indirect tax law. However, the issue of the discharge certificate with respect to a particular matter for a specific period shall not preclude the authorities from issuance of a show cause notice for the same matter for any other/ subsequent period.

 

7) Exclusions: A declaration under this scheme cannot be made in cases where:-

  • An appeal has been heard finally on or before 30 June 2019;
  • The person has been convicted for any offence punishable under any provision of the indirect tax for the matter for which he intends to file a declaration;
  • A show cause notice has been issued and the final hearing has taken place on or before 30 June 2019;
  • A show cause notice has been issued for an erroneous refund or refund;
  • The person has 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 30 June 2019;
  • A person making voluntary disclosure after being subjected to any enquiry or investigation or audit 
  • A person who has filed a return and has indicated an amount of duty as payable, but has not paid it;
  • An application has been filed in the Settlement Commission for settlement of a case;
  • A person seeks to make declarations with respect to excisable goods set forth in the Fourth schedule to the Central Excise Act, 1944;

It has been the constant endeavour of the Government to eliminate various kinds of complexities under the indirect tax laws and is further expected that additional steps shall be taken by the Government to address the various encumbrances stumbled upon by the industry to achieve the goal of Good and Simple Tax. 

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Regards,

TheTaxTellers Team

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