In the Union Budget 2019-20, the Finance Minister announced the Sabka Vishwas-Legacy Dispute Resolution Scheme, 2019.
The Scheme has now been notified and will be operationalized from 1st September 2019 and would continue till 31st December 2019.
Sabka Vishwas-Legacy Dispute Resolution Scheme
This Scheme is introduced to resolve and settle legacy cases of the Central Excise and Service Tax.
The proposed Scheme would cover all the past disputes of taxes which may have got subsumed in GST; namely Central Excise, Service Tax and Cesses.
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 Scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration.
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 lakhs or less and 50% if it is more than Rs. 50 lakhs.
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 30th June, 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 lakhs or less and it is 40%, if the confirmed duty amount is more than Rs. 50 lakhs.
Finally, in cases of voluntary disclosure, the person availing the Scheme will have to pay only the full amount of disclosed duty.
Components of the Scheme
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 in 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.
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,
In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.