Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Central Excise and Service Tax A dispute resolution cum amnesty scheme cal...
Sabka Vishwas
(Legacy Dispute Resolution) Scheme, 2019 – Central Excise and Service Tax
A dispute
resolution cum amnesty scheme called the Sabka Vishwas Legacy Dispute
Resolution Scheme is being introduced for resolution and settlement of legacy
cases of Central Excise and Service Tax.
The proposed
Scheme covers past disputes of taxes which have got subsumed in GST namely
Central Excise, Service Tax and Cesses. All persons are eligible to avail the
scheme except a few exclusions including as those convicted under the act in
the case for which he intends to make declaration and those who have filed an
application before the Settlement Commission.
Short title
and commencement
(1) This
Scheme shall be called the Sabka Vishwas (Legacy Dispute Resolution) Scheme,
2019 (hereafter in this Chapter referred to as the “Scheme”).
(2) It shall
come into force on such date as the Central Government may, by notification in
the Official Gazette, appoint.
Definitions
In this
Scheme, unless the context otherwise requires,—
(a ) “amount
declared” means the amount declared by the declarant under section 124;
(b) “amount
estimated” means the amount estimated by the designated committee under section
126;
(c) “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 30th day of June, 2019, wherein he has admitted a tax liability
but not paid it;
(d) “amount
of duty “ means the amount of central excise duty, the service tax and the cess
payable under the indirect tax enactment;
(e) “amount
payable” means the final amount payable by the declarant as determined by the
designated committee and as indicated in the statement issued by it, in order
to be eligible for the benefits under this Scheme and shall be calculated as
the amount of tax dues less the tax relief;
(f)
“appellate forum” means the Supreme Court or the High Court or the Customs,
Excise and Service Tax Appellate Tribunal or the Commissioner ( Appeals);
(g) “audit”
means any scrutiny, verification and checks carried out under the indirect tax
enactment, other than an enquiry or investigation, and will commence when a
written intimation from the central excise officer regarding conducting of
audit is received;
(h)
“declarant” means a person who is eligible to make a declaration and files such
declaration under section 124;
(i )
“declaration” means the declaration filed under section 124;
(j)
“departmental appeal” means the appeal filed by a central excise officer
authorized to do so under the indirect tax enactment, before the appellate
forum;
(k)
“designated committee” means the committee referred to in section 125;
(l)
“discharge certificate” means the certificate issued by the designated
committee under section 126;
(m) ‘‘enquiry
or investigation’’, under any of the indirect tax enactment, shall include the
following actions, namely:—
(i) search of
premises;
(ii) issuance
of summons;
(iii)
requiring the production of accounts, documents or other evidence;
(iv)
recording of statements;
(n) “indirect
tax enactment” means the enactments specified in section 121;
(o) “order”
means an order of determination under any of the indirect tax enactment, passed
in relation to a show cause notice issued under such indirect tax enactment;
(p) “order in
appeal” means an order passed by an appellate forum with respect to an appeal
filed before it;
(q) “person”
includes—
(i) an
individual;
(ii) a Hindu
undivided family;
(iii) a
company;
(iv) a
society;
(v) a limited
liability partnership;
(vi) a firm;
(vii) an
association of persons or body of individuals, whether incorporated or not;
(viii)the
Government;
(ix) a local
authority;
(x) an
assessee as defined in rule 2 of the Central Excise Rules, 2002;
(xi) every
artificial juridical person, not falling within any of the preceding clauses.
(r)
‘‘quantified”, with its cognate expression, means a written communication of
the amount of duty payable under the indirect tax enactment;
(s)
“statement” means the statement issued by the designated committee under
section 126;
(t) “tax
relief” means the amount of relief granted under section 123;
(u) all other
words and expressions used in this Scheme, but not defined, shall have the same
meaning as assigned to them in the indirect tax enactment and in case of any
conflict between two or more such meanings in any indirect tax enactment, the
meaning which is more congruent with the provisions of this Scheme shall be
adopted.
Application
of Scheme to indirect tax enactments
This Scheme
shall be applicable to the following enactments, namely:—
(a) the
Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or Chapter V of
the Finance Act, 1994 and the rules made thereunder;
(b) the
following Acts, namely:—
(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;
(c) any other
Act, as the Central Government may, by notification in the Official Gazette,
specify.
Tax dues
For the
purposes of the Scheme, “tax dues” means—
(a) where—
(i) a single
appeal arising out of an order is pending as on the 30th day of June, 2019
before the appellate forum, the total amount of duty which is being disputed in
the said appeal;
(ii) more
than one appeal arising out of an order, one by the declarant and the other
being a departmental appeal, which are pending as on the 30th day of June, 2019
before the appellate forum, the sum of the amount of duty which is being
disputed by the declarant in his appeal and the amount of duty being disputed
in the departmental appeal:
Provided that
nothing contained in the above clauses shall be applicable where such an appeal
has been heard finally on or before the 30th day of June, 2019.
Illustration
1:
The show cause notice to a declarant was for an amount of duty of Rs.1000 and
an amount of penalty of Rs.100. The order was for an amount of duty of Rs.1000
and amount of penalty of Rs.100. The declarant files an appeal against this
order. The amount of duty which is being disputed is Rs.1000 and hence the tax
dues are Rs.1000.
Illustration
2:
The show cause notice to a declarant was for an amount of duty of Rs.1000 and
an amount of penalty of Rs.100. The order was for an amount of duty of Rs.900
and penalty of Rs.90. The declarant files an appeal against this order. The
amount of duty which is being disputed is Rs.900 and hence tax dues are Rs.900.
Illustration 3: The show cause notice to a declarant was for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. The order was for an amount of duty of Rs.900 and penalty of Rs 90. The declarant files an appeal against this order of determination. The departmental appeal is for an amount of duty of Rs.100 and penalty of Rs.10. The amount of duty which is being disputed is Rs.900 plus Rs.100 i.e Rs.1000 and hence tax dues are Rs.1000.
Illustration
4:
The show cause notice to a declarant was for an amount of duty of Rs.1000. The
order was for an amount of duty of Rs.1000. The declarant files an appeal
against this order of determination. The first appellate authority reduced the
amount of duty to Rs.900. The declarant files a second appeal. The amount of
duty which is being disputed is Rs.900 and hence tax dues are Rs.900;
(b) where a
show cause notice under any of the indirect tax enactment has been received by
the declarant on or before the 30th day of June, 2019, then, the amount of duty
stated to be payable by the declarant in the said notice:
Provided that
if the said notice has been issued to the declarant and other persons making
them jointly and severally liable for an amount, then, the amount indicated in
the said notice as jointly and severally payable shall be taken to be the
amount of duty payable by the declarant;
(c) where an
enquiry or investigation or audit is pending against the declarant, the amount
of duty payable under any of the indirect tax enactment which has been
quantified on or before the 30th day of June, 2019;
(d) where the
amount has been voluntarily disclosed by the declarant, then, the total amount
of duty stated in the declaration;
(e) where an
amount in arrears relating to the declarant is due, the amount in arrears.
Relief available under Scheme
(1) Subject to the conditions specified in sub-section (2), the
relief available to a declarant under this Scheme shall be calculated as
follows:
(a) where the
tax dues are relatable to a show cause notice or one or more appeals arising
out of such notice which is pending as on the 30th day of June, 2019, and if
the amount of duty is,—
(i) rupees
fifty lakhs or less, then, seventy per cent. of the tax dues;
(ii) more
than rupees fifty lakhs, then, fifty per cent. of the tax dues;
(b) where the
tax dues are relatable to a show cause notice for late fee or penalty only, and
the amount of duty in the said notice has been paid or is nil, then, the entire
amount of late fee or penalty;
(c) where the
tax dues are relatable to an amount in arrears and,—
(i) the
amount of duty is, rupees fifty lakhs or less, then, sixty per cent. of the tax
dues;
(ii) the
amount of duty is more than rupees fifty lakhs, then, forty per cent. of the tax
dues;
(iii) in a
return under the indirect tax enactment, wherein the declarant has indicated an
amount of duty as payable but not paid it and the duty amount indicated is,—
(A)
rupees fifty lakhs or less, then, sixty per cent. of the tax dues;
(B) amount
indicated is more than rupees fifty lakhs, then, forty per cent. of the tax
dues;
(d) where the
tax dues are linked to an enquiry, investigation or audit against the declarant
and the amount quantified on or before the 30th day of June, 2019 is—
(i) rupees
fifty lakhs or less, then, seventy per cent. of the tax dues;
(ii) more
than rupees fifty lakhs, then, fifty per cent. of the tax dues;
(e) where the
tax dues are payable on account of a voluntary disclosure by the declarant,
then, no relief shall be available with respect to tax dues.
(2) The relief calculated under sub-section (1) shall be subject
to the condition that any amount paid as pre-deposit at any stage of appellate
proceedings under the indirect tax enactment or as deposit during enquiry,
investigation or audit, shall be deducted when issuing the statement indicating
the amount payable by the declarant:
Provided that if the amount of pre-deposit or deposit already paid
by the declarant exceeds the amount payable by the declarant, as indicated in
the statement issued by the designated committee, the declarant shall not be
entitled to any refund.
Declaration under Scheme
(1) All persons shall be eligible to make a 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 30th 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;
(2) A declaration under sub-section (1) shall be made in such
electronic form as may be prescribed
Verification of declaration by
designated committee
(1) The designated committee shall verify the correctness of the
declaration made by the declarant under section 124 in such manner as may be
prescribed:
Provided that no such verification shall be made in case where a
voluntary disclosure of an amount of duty has been made by the declarant.
(2) The composition and functioning of the designated committee
shall be such as may be prescribed
Issue of statement by designated
committee
(1) Where the amount estimated to be payable by the declarant, as
estimated by the designated committee, equals the amount declared by the
declarant, then, the designated committee shall issue in electronic form, a
statement, indicating the amount payable by the declarant, within a period of
sixty days from the date of receipt of the said declaration.
(2) Where the amount estimated to be payable by the declarant, as
estimated by the designated committee, exceeds the amount declared by the
declarant, then, the designated committee shall issue in electronic form, an
estimate of the amount payable by the declarant within thirty days of the date
of receipt of the declaration.
(3) After the issue of the estimate under sub-section (2), the
designated committee shall give an opportunity of being heard to the declarant,
if he so desires, before issuing the statement indicating the amount payable by
the declarant:
Provided that on sufficient cause being shown by the declarant,
only one adjournment may be granted by the designated committee.
(4) After hearing the declarant, a statement in electronic form
indicating the amount payable by the declarant, shall be issued within a period
of sixty days from the date of receipt of the declaration.
(5) The declarant shall pay electronically through internet
banking, the amount payable as indicated in the statement issued by the
designated committee, within a period of thirty days from the date of issue of
such statement.
(6) Where the declarant has filed an appeal or reference or a
reply to the show cause notice against any order or notice giving rise to the
tax dues, before the appellate forum, other than the Supreme Court or the High
Court, then, notwithstanding anything contained in any other provisions of any
law for the time being in force, such appeal or reference or reply shall be
deemed to have been withdrawn.
(7) Where the declarant has filed a writ petition or appeal or
reference before any High Court or the Supreme Court against any order in
respect of the tax dues, the declarant shall file an application before such
High Court or the Supreme Court for withdrawing such writ petition, appeal or
reference and after withdrawal of such writ petition, appeal or reference with
the leave of the Court, he shall furnish proof of such withdrawal to the
designated committee, in such manner as may be prescribed, along with the proof
of payment referred to in sub-section (5).
(8) On payment of the amount indicated in the statement of the
designated committee and production of proof of withdrawal of appeal, wherever
applicable, the designated committee shall issue a discharge certificate in
electronic form, within thirty days of the said payment and production of
proof.
Rectification of errors
Within thirty days of the date of issue of a statement indicating
the amount payable by the declarant, the designated committee may modify its
order only to correct an arithmetical error or clerical error, which is
apparent on the face of record, on such error being pointed out by the
declarant or suo motu, by the designated committee.
Issue of discharge certificate to
be conclusive of matter and time period
(1) Every discharge certificate issued under section 126 with
respect to the amount payable under this Scheme shall be conclusive as to the
matter and time period stated therein, and–
(a) the
declarant shall not be liable to pay any further duty, interest, or penalty
with respect to the matter and time period covered in the declaration;
(b) the
declarant shall not be liable to be prosecuted under the indirect tax enactment
with respect to the matter and time period covered in the declaration;
(c) no matter
and time period covered by such declaration shall be reopened in any other
proceeding under the indirect tax enactment
(2) Notwithstanding anything contained in sub-section (1),—
(a) no person
being a party in appeal, application, revision or reference shall contend that
the central excise officer has acquiesced in the decision on the disputed issue
by issuing the discharge certificate under this scheme;
(b) the issue
of the discharge certificate with respect to a matter for a time period shall
not preclude the issue of a show cause notice,—
(i) for the
same matter for a subsequent time period; or
(ii) for a
different matter for the same time period;
(c) in a case
of voluntary disclosure where any material particular furnished in the declaration
is subsequently found to be false, within a period of one year of issue of the
discharge certificate, it shall be presumed as if the declaration was never
made and proceedings under the applicable indirect tax enactment shall be
instituted.
Restrictions of Scheme
(1) Any amount paid under this Scheme,—
(a) shall not
be paid through the input tax credit account under the indirect tax enactment
or any other Act;
(b) shall not
be refundable under any circumstances;
(c) shall
not, under the indirect tax enactment or under any other Act,—
(i) be taken
as input tax credit; or
(ii) entitle
any person to take input tax credit, as a recipient, of the excisable goods or
taxable services, with respect to the matter and time period covered in the
declaration.
(2) In case any pre-deposit or other deposit already paid exceeds
the amount payable as indicated in the statement of the designated committee,
the difference shall not be refunded
Removal of doubts
For the removal of doubts, it is hereby declared that, save as
otherwise expressly provided in sub-section (1) of section 123, nothing
contained in this Scheme shall be construed as conferring any benefit,
concession or immunity on the declarant in any proceedings other than those in
relation to the matter and time period to which the declaration has been made.
Power to make rules
(1) The Central Government may, by notification in the Official
Gazette, make rules for carrying out the provisions of this Scheme.
(2) Without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters, namely:—
(a) the form
in which a declaration may be made and the manner in which such declaration may
be verified;
(b) the
manner of constitution of the designated committee and its rules of procedure
and functioning;
(c) the form
and manner of estimation of amount payable by the declarant and the procedure
relating thereto;
(d) the form
and manner of making the payment by the declarant and the intimation regarding
the withdrawal of appeal;
(e) the form
and manner of the discharge certificate which may be granted to the declarant;
(f) the
manner in which the instructions may be issued and published;
(g) any other
matter which is to be, or may be, prescribed, or in respect of which provision
is to be made, by rules.
(3) The Central Government shall cause every rule made under this
Scheme to be laid, as soon as may be after it is made, before each House of
Parliament, while it is in session for a total period of thirty days which may
be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in
the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.
Power to issue orders,
instructions, etc.
(1) The Central Board of Indirect Taxes and Customs may, from time
to time, issue such orders, instructions and directions to the authorities, as
it may deem fit, for the proper administration of this Scheme, and such
authorities, and all other persons employed in the execution of this Scheme
shall observe and follow such orders, instructions and directions:
Provided that no such orders, instructions or directions shall be
issued so as to require any designated authority to dispose of a particular
case in a particular manner.
(2) Without prejudice to the generality of the foregoing power,
the Central Board of Indirect Taxes and Customs may, if it considers necessary
or expedient so to do, for the purpose of proper and efficient administration
of the Scheme and collection of revenue, issue, from time to time, general or
special orders in respect of any class of cases, setting forth directions or
instructions as to the guidelines, principles or procedures to be followed by
the authorities in the work relating to administration of the Scheme and
collection of revenue and any such order may, if the said Board is of opinion
that it is necessary in the public interest so to do, be published in the
prescribed manner.
Removal of difficulties
(1) If any difficulty arises in giving effect to the provisions of
this Scheme, the Central Government may, by order, not inconsistent with the
provisions of this Scheme, remove the difficulty:
Provided that no such order shall be made after the expiry of a
period of two years from the date on which the provisions of this Scheme come
into force.
(2) Every order made under this section shall, as soon as may be
after it is made, be laid before each House of Parliament.
Protection to officers
(1) No suit, prosecution or other legal proceeding shall lie
against the Central Government or any officer of the Central Government for
anything which is done, or intended to be done in good faith, in pursuance of
this Scheme or any rule made thereunder.
(2) No proceeding, other than a suit shall be commenced against
the Central Government or any officer of the Central Government for anything
done or purported to have been done in pursuance of this Scheme, or any rule
made thereunder, without giving the Central Government or such officer a prior
notice of not less than one month in writing of the intended proceeding and of
the cause thereof, or after the expiration of three months from the accrual of such
cause.
(3) No proceeding shall be commenced against any officer only on
the ground of subsequent detection of an error in calculating the amount of
duty payable by the declarant, unless there is evidence of misconduct.
Hope
the information will assist you in your Professional endeavours. In case of any
query/ information, please do not hesitate to write back to us.
Thanks & Best
Regards,
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
COMMENTS