The government has announced a new scheme aimed at eliminating the bulk of pending tax dispute cases besides providing partial amnesty to those having tax dues.
Finance Minister Nirmala Sitharaman had, in her Budget speech, announced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. This scheme will be operationalised from September 1 with the window being open till December 31.
“[The] government expects the scheme to be availed of by a large number of taxpayers for closing their pending disputes relating to legacy service tax and central excise cases that are now subsumed under GST (Goods and Services Tax) so that they can focus on GST,” the government said in a statement.
ADVERTISEMENT
“The two main components of th scheme are dispute resolution and amnesty,” the statement added.
“The dispute resolution component is aimed at liquidating the legacy cases of central excise and service tax that are subsumed in GST and are pending in litigation at various forums.”
The amnesty component of the scheme offers taxpayers the opportunity to pay any outstanding tax and be free of any other consequence under the law.
ADVERTISEMENT
“The most attractive aspect of the scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine, penalty,” the statement added.
“There is also a complete amnesty from prosecution.”
According to the government, the scheme offers a relief of 70% from the duty demand if it is less than ₹50 lakh and 50% if it is more than ₹50 lakh for all cases pending adjudication or appeal in any forum.
“The same relief is available for cases under investigation and audit where the duty involved is quantified and communicated to the party or admitted by him in a statement on or before June 30, 2019,” the statement said.
“Further, in cases of confirmed duty demand, where there is no appeal pending, the relief offered is 60% of the confirmed duty amount if the same is ₹50 lakh or less and it is 40% if the confirmed duty amount is more than ₹50 lakh.” In cases of voluntary disclosure, the person availing the scheme will have to only pay the full amount of disclosed duty.
“As the objective of the scheme is to free as large a segment of the taxpayers from the legacy taxes as possible, the relief given thereunder is substantial,” the government said. “The scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration. The government urges the taxpayers and all concerned to avail the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and make a new beginning.”