Sabka Vishwas Scheme 2019 (Legacy Dispute Resolution)

The Sabka VishwasScheme (Legacy Dispute Resolution) is a scheme for liquidation of past issues of Central Excise and Service Tax and to make certain disclosure of unpaid taxes by an individual eligible to make a declaration.

This scheme comes with a validity of 4 months beginning from 1st September 2019 to 31st December 2019. This scheme is for taxpayers who want to close their pending concerns, with a substantial relief given by the government.

Objectives of Sabka Vishwas Scheme 2019

a) This scheme encourages voluntary disclosure of past concerns of Central Excise, Service-tax as well as 26 other Indirect-tax enactments;

b) Towards facilitating an eligible individual in order to declare the unpaid tax dues as well as pay it in accordance with the clauses of the scheme;

c) Towards providing some immunity, which includes penalty, interest or any additional proceedings which include prosecution, towards eligible individuals who pay the stated tax dues. 

The benefits of this scheme

The scheme gives many beneficial resolution benefits towards taxpayers, for instance-

•    Taxpayers could pay the unpaid tax amounts due as well as be free from any additional consequences under the Law. 

•    Taxpayers would obtain substantial relief in the form of full waivers of interest, penalties as well as charges. 

•    There shall be a complete amnesty from trial proceedings.

The benefit of the scheme can be availed by-

The scheme is opted for relating to the following:

•    All those matters where no appeal was filed by the taxpayer before the expiration of the time period;

•    Any kind of tax concern in any appellate forum which has reached finality;

•    Taxpayers have admitted tax liability in a return filed on or before 30th June 2019.

The benefit of the scheme cannot be availed by-

This scheme shall not be opted by an individual who:

•    Had filed an appeal before appellate forum as well as the final hearing concluded on or before 30th June 2019;

•    Had been convicted under Indirect tax enactment for any wrongdoing for the matter for which he aims to file a declaration;

•    Has been issued a show-cause notice and final hearing had taken place already on or before 30th June 2019;

•    Had been issued a show-cause notice for the wrong refund;

•    Had been subjected towards inquiry or investigation or audit as well as the amount of duty not counted on or before 30th June 2019;

•    Had filed an application in the Settlement Commission for settlement of a matter;

•    Aims to file a declaration with regard to excisable products which are petroleum, tobacco and related tobacco goods as stated in the Fourth Schedule to the Central Excise Act, 1944;

•    Makes a voluntary disclosure after the individual was subjected towards inquiry or investigation or auditor has filed a return, in which the individual has indicated an amount of duty as payable, but did not pay it.

Relief available under Sabka Vishwas Scheme

a) Where a show-cause notice had been issued or an appeal was filed, or inquiry, investigation or audit against the individual has been carried out on or before the 30th June 019 wherein the amount of duty quantified is:

•    Rs. 50 lakhs or below, 70% of the tax dues would be waived off

•    Above Rs. 50 lakhs, 50% of the tax dues would be waived off

b) In which the tax dues are relatable towards a show-cause notice for late fee or fine only, and the amount of duty in the held notice was paid or it is nil, then 100% of the amount of late charge or fine would be waived off;

c) In which the tax dues are in arrears and the amount of duty is:

•    Rs. 50 lakhs or below, then 60% of the tax dues would be waived off;

•    Above Rs. 50, then 40% of the tax dues would be waived off.

d) In which the individual had indicated in the return form (filed under the Indirect-tax enactment) an amount of duty as payable but did not pay it and the duty of amount is:
•    Rs. 50 lakhs or below, then 60% of the tax dues would be waived off;

•    Above Rs. 50 lakhs, then 40% of the tax dues would be waived off.

e) Relating to voluntary disclosure as made by the individual, then, no relief would be available pertaining to tax dues.

Also, the individual would not be liable towards paying any further duty, interest or fine and the concerned case would not be reopened in any additional proceeding under the Indirect tax regime. Though in case any false declaration has been made involuntary disclosure, proceedings under applicable laws would take place within a time limit of one year.

Restrictions of the Sabka Vishwas scheme:

The restrictions which have been placed under the Sabka Vishwas Scheme 2019 (Legacy Dispute Resolution) are:

• Tax dues payable would not be paid by means of input tax credit account.

• Tax dues paid would not be taken as an input tax credit or entitle any individual to take an input tax credit as a recipient of excisable products or taxable services.

• Tax dues paid would not be refundable under any conditions.

How would this Sabka Vishwas scheme function?

1. A declaration under section 125 is required to be filed electronically on https://cbic-gst.gov.in, on or before the 31stof December 2019 in Form SVLDRS-1. A separate declaration is required to be filed for each case in order to be resolved.

2. Upon receiving the declaration, the system shall automatically produce a unique reference number.

3. The chosen committee would authenticate the submitted declaration, depending on the details given by the declarant, and depending on the records that existing already within the department. This confirmation would not be conducted in cases of voluntary disclosure.

4. A statement shall be issued through the chosen committee in Form SVLDRS-3, in a time period of 60 days from the date of receiving of the declaration, with the details of the amount payable. In case the amount payable is NIL, and if no appeal pending in a High Court or the Supreme Court, then this statement would not be issued.

5. In matters where the expected amount payable becomes more than what was declared by the individual, then the chosen committee shall issue an estimation of the amount payable in Form SVLDRS-2 in 30 days of the receiving of the declaration. This must contain an opportunity for a personal hearing.

•    In case the individual wants to agree or disagree with the estimation calculated through the chosen committee, in order to make any written submission, towards waiving the personal hearing or to search for an adjournment, the individual would require filing Form SVLDRS-2A and specifying the same.

•    In case the above form was not been filed, or if the individual doesn’t appear before the chosen committee on the fixed date, then the committee would make its decision depending on the available records.

6. The chosen committee would have the power towards modifying its order and shall issue a revised Form SVLDRS-3, provided-

•    The modification was done within 30 days of issuing the original Form SVLDRS-3.

•    It is only to correct an arithmetical or clerical mistake, on the record.

7. The individual is supposed to pay the sum indicated in Form SVLDRS-3, within 30 days from the date of its issue.

8. When applicable, withdrawal proof of the appeal or writ petition filed before a High Court or Supreme Court requires to be provided by the individual.

9. When the chosen committee was satisfied that the individual has paid the amount in full, it would issue a discharge certificate in Form SVLDRS-4 in 30 days of payment being made.

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Author:

eStartIndia Team