SabkaVishwas - Legacy Dispute Resolution Scheme, 2019 announced by finance minister in the Union budget will be operationalised from September 1. The scheme would continue till December 31.
Government expects the scheme to be availed by large number of taxpayers for closing their pending disputes relating to legacy service tax and central excise cases that are now subsumed under GST, so they can focus on GST.
The two main components of the scheme are dispute resolution and amnesty. The dispute resolution component is aimed at liquidating the legacy cases of Central Excise and Service Tax that are subsumed into GST and are pending in litigation at various forums.
The amnesty component of the scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any other consequence under the law.
Relief in Tax dues
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 and penalty. In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.
For all the cases pending in adjudication or appeal – in any forum - this Scheme offers a relief of 70% from the duty demand if it is Rs 50 lakh or less and 50% if it is more than Rs 50 lakh.
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. 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 Rs 50 lakh or less and it is 40% if the confirmed duty amount is more than Rs 50 lakh. Finally, in cases of voluntary disclosure, the person availing the scheme will have to pay only 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 there under is substantial.
The scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration, according to Principal Commissioner, Central Excise and Central Tax Commissionerate of Mangaluru.