All about Sabka Vishwas Scheme

Last Updated On: Oct. 15, 2019, 1:20 a.m.
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Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

The Sabka Vishwas Scheme, 2019 is a scheme proposed in the Union Budget, 2019, and introduced to resolve all disputes relating to the erstwhile Service Tax and Central Excise Acts. The scheme will be for taxpayers who wish to close their pending disputes, with a substantial relief provided by the government.

 

 

legalsuvidha.com/sabka-vishwas-scheme-cbic

Source: CBIC

 

The scheme comes with a validity of 4 months starting from September 1, 2019, to December 31, 2019. It also provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1944 to those persons who pay the declared tax dues. Major objectives behind such a scheme are to give relief to the taxpayers so that they can pay their defaulted amounts and to resolve litigation without wasting the time of departmental authorities.

There are 26 enactments to which the Sabka Vishwas Scheme, 2019 is applicable including

(i) The Agricultural Produce Cess Act,1940; (ii) The Coffee Act, 1942

(iii) The Mica Mines Labour Welfare Fund Act, 1946

(iv) The Rubber Act, 1947

(v) The Salt Cess Act, 1953

(vi) The Medicinal and Toilet Preparations (Excise Duties) Act, 1955.

Cases included in the scheme,2019:

  • Notice of appeals arising out of a show-cause notice pending as on the 30th day of June 2019
  • Amount in arrears
  • Inquiry, investigation or audit where the amount is quantified on or before the 30th day of June 2019
  • Voluntary disclosure            


Cases excluded under the scheme 2019 are:

Excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 (this includes tobacco and specified petroleum products) 

The taxpayer has been convicted under the Central Excise Act, 1944 or the Finance Act, 1944 

Erroneous refunds 

Pending before the Settlement Commission

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: CBIC

 

 

Benefits under the Scheme:

  • Taxpayers can pay the outstanding tax amounts due and be free from any other consequences under the Law. 
  • Taxpayers will get substantial relief in the form of full waivers of interest, penalties, and fines. 
  • Complete amnesty from prosecution proceedings.

Please note that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as a deposit during inquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant. However if Pre-deposit or deposit amount exceeds the amount payable under-declaration, the declarant shall not be entitled to any refund.

 

Format of SVLDRS-1

 

Functioning of SVLDRS-1

1. A declaration under section 125 needs to be filed electronically on Government Portal, on or before the 31st of December, 2019 in Form SVLDRS-1. A separate declaration needs to be filed for each case to be resolved.

2. On receipt of the declaration, the system will automatically generate a URN (unique reference number).

3. The committee shall verify the declaration submitted, based on the particulars furnished by the declarant, and based on the records that are already available within the department. This verification shall not be done in cases of voluntary disclosure.

4. A statement will be issued by the committee in Form SVLDRS-3, within a period of 60 days from the date of receipt of the declaration, with the particulars of the amount payable. If the amount payable is nil, and there is no appeal pending in either a High Court or the Supreme Court, then this statement will not be issued.

5. In cases where the estimated amount payable turns out to be more than what has been declared by the declarant, then the committee should issue an estimate of the amount payable in Form SVLDRS-2 within 30 days of the receipt of the declaration. This should include an opportunity for a personal hearing.

6. The condition arises in certain cases to be resolved:

If the declarant wishes to agree or disagree with the estimate calculated by the committee, to make any written submission, to waive the personal hearing, or to seek an adjournment, he will need to file Form SVLDRS-2A and indicate the same.

If the above form has not been filed, or if the declarant does not appear before the designated committee on the appointed date, then the committee will make its decision based on the records available.

7. The committee will have the power to modify its order and issue a revised Form SVLDRS-3, provided-

    The modification has been done within 30 days of issuing the original Form SVLDRS-3.

    It is only to correct an arithmetical or clerical error, which is apparent on the face of the record.

8. The declarant is supposed to pay the amount indicated in Form SVLDRS-3, within 30 days from the date of its issue.

9. When applicable, proof of withdrawal of the appeal or writ petition filed before a High Court or Supreme Court needs to be furnished by the declarant.

10. Once the committee has been satisfied with the verification than the declarant has paid the amount in full, it will issue a discharge certificate in Form SVLDRS-4 within 30 days of payment being made.

 

 

 

 

Relief available under Sabka Vishwas Scheme:

 

 

a) Where an SCN has been issued or an appeal has been filed, or inquiry, investigation or audit against the declarant has been conducted on or before the 30-06-2019 in which the amount of duty quantified is:

Rs. 50 lakhs or less, 70% of the tax dues shall be waived off

More than Rs. 50 lakhs, 50% of the tax dues shall be waived off

b) Where the tax dues are relatable to an SCN for late fee or penalty only, and the amount of duty in the said notice has been paid or it is nil, then 100% of the amount of late fee or penalty shall be waived off;

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

Rs. 50 lakhs or less, then 60% of the tax dues shall be waived off;

More than Rs. 50, then 40% of the tax dues shall be waived off.

d) Where declarant has indicated in the return form (filed under the Indirect-tax enactment) an amount of duty as payable but not paid it and the duty of amount is:

Rs. 50 lakhs or less, then 60% of the tax dues shall be waived off;

More than Rs. 50 lakhs, then 40% of the tax dues shall be waived off.

This is a more liberal scheme compared to the previous Voluntary Compliance Encouragement Scheme (VCES) scheme. (VCES) offered waiver of interest and penalty only, whereas LDRS not only provides for waiver of Interest and Penalty but a waiver of Tax dues also. So, this is the golden opportunity for those who want to get rid of litigation and pending tax liability.

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