UPDATE ON SABKA VISHWAS SCHEME, 2019 PART-1

UPDATE ON SABKA VISHWAS SCHEME, 2019 PART-1

It was being demanded by the trade and industry that an Amnesty Scheme should be launched for clearing all the pending litigation of erstwhile indirect taxation regime. It appears that the government has considered the various representations made and has introduced “SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019. The present update seeks to give an overview of the basic framework of this newly proposed scheme to resolve disputes pertaining to erstwhile indirect taxation regime.

This Scheme is applicable to specific enactments, prominent being the Central Excise Act, 1944, the Central Excise Tariff Act, 1985, the Finance Act, 2004, the Finance Act, 2007, the Finance Act, 2015 and the Finance Act, 2016. The quantum of relief under this scheme is based on various parameters which will be discussed later. First of all, we discuss the eligibility to file declaration under this scheme. All persons shall be eligible for making declaration under this scheme except the following namely-

(a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019;

(b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration;

(c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019;

(d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;

(e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30^th day of June, 2019;

(f) a person making a voluntary disclosure,—
(i) after being subjected to any enquiry or investigation or audit; or

(ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it;

(g) who have filed an application in the Settlement Commission for settlement of a case;

(h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;

The scheme further provides relief with respect to ‘tax dues’ according to specified parameters. The term ‘tax dues’ has wide meaning and include “amount in arrears”.

The definition of the term “amount in arrears” is discussed as follows:-
“amount in arrears” means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of—
(i) no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal; or

(ii) an order in appeal relating to the declarant attaining finality; or

(iii) the declarant having filed a return under the indirect tax enactment on or before the 30^th day of June, 2019, wherein he has admitted a tax liability but not paid it;

The meaning of the term ‘tax dues’ will be discussed in our next update.

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