Sabka Vishwas Legacy Dispute Resolution Scheme is an ambitious scheme made available for the pre-GST taxpayers to resolve the tax disputes.
1. What is 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, which are now subsumed under GST, as well as 26 other Indirect Tax enactments (as listed below). The scheme will be for taxpayers who wish to close their pending disputes, with a substantial relief provided by the government.
These are the 26 enactments to which the Sabka Vishwas Scheme, 2019, also applies-
(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;
(vii) The Additional Duties of Excise (Goods of Special Importance) Act, 1957;
(viii) The Mineral Products (Additional Duties of Excise and Customs) Act, 1958;
(ix) The Sugar (Special Excise Duty) Act, 1959;
(x) The Textiles Committee Act, 1963;
(xi) The Produce Cess Act, 1966;
(xii) The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972;
(xiii) The Coal Mines (Conservation and Development) Act, 1974;
(xiv) The Oil Industry (Development) Act, 1974;
(xv) The Tobacco Cess Act, 1975;
(xvi) The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976;
(xvii) The Bidi Workers Welfare Cess Act, 1976;
(xviii) The Additional Duties of Excise (Textiles and Textile Articles) Act, 1978;
(xix) The Sugar Cess Act, 1982;
(xx) The Jute Manufacturers Cess Act, 1983;
(xxi) The Agricultural and Processed Food Products Export Cess Act, 1985;
(xxii) The Spices Cess Act, 1986;
(xxiii) The Finance Act, 2004;
(xxiv) The Finance Act, 2007;
(xxv) The Finance Act, 2015;
(xxvi) The Finance Act, 2016;
2. From when will this scheme become operational?
The scheme has been notified by the CBIC to come into force on the 1st of September, 2019, and shall be operational until the 31st of December, 2019.
3. What are the cases covered under this scheme?
The following cases are covered under the Sabka Vishwas Scheme, 2019-
- A show cause notice or appeals arising out of a show cause notice pending as on the 30th day of June, 2019
- An amount in arrears
- An enquiry, investigation or audit where the amount is quantified on or before the 30th day of June, 2019
- A voluntary disclosure
However, there will be certain cases excluded under this scheme-
- Cases in respect of excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 (this includes tobacco and specified petroleum products)
- Cases for which the taxpayer has been convicted under the Central Excise Act, 1944 or the Finance Act, 1944
- Cases involving erroneous refunds
- Cases pending before the Settlement Commission
4. What are the benefits of this scheme?
This scheme offers several lucrative resolution benefits to taxpayers, such as-
- 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.
- There will be complete amnesty from prosecution proceedings.
5. What is the relief provided under this scheme?
This scheme provides for a substantial relief margin on all Duty demands, ranging from 40% to 70% of the demand, except in the case of voluntary disclosure. The relief will be applicable as follows-
|Relief Available from the Duty Demand||For Cases Pending Adjudication or Appeal*||For Cases of Confirmed Duty Demands (Where No Appeal is Pending)||For Cases of Voluntary Disclosure|
|Duty demands up to Rs.50 lakh||70%||60%||The full amount of duty disclosed|
|Duty demands >Rs.50 lakh||50%||40%|
*For cases under investigation or audit, the same relief will also be available, however, the amount should have been quantified and communicated to the concerned party, or admitted by him in a statement, on or before the 30th of June, 2019.
6. How will this scheme function?
1. A declaration under section 125 needs to be filed electronically on https://cbic-gst.gov.in, 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 unique reference number.
3. The designated 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 designated 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 designated 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.
- If the declarant wishes to agree or disagree with the estimate calculated by the designated 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.
6. The designated 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 record.
7. The declarant is supposed to pay the amount indicated in Form SVLDRS-3, within 30 days from the date of its issue.
8. 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.
9. Once the designated committee has been satisfied that 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.
7. What is the format of SVLDRS-1?