By TIOL News Service

NEW DELHI, FEB 29, 2016: ANOTHER Indirect Tax Dispute Resolution Scheme makes its appearance – but tis' not named voluntary.

Clauses 209 to 215 of the Finance Bill, 2016 formulates the launch pad for the new Dispute Resolution Scheme on the Indirect Tax side.

Not that anyone is averse to such ‘resolution schemes' but the fact of the matter is that this scheme has a constricted sphere of operation. It operates only in respect of ‘impugned order' means any order which is under challenge before the Commissioner (Appeals).

The salient features, to name a few, are that the scheme comes into force on 1 st day of June 2016; the declarations are to be made up to the 31 st December 2016; the ‘indirect tax dispute' means the dispute which is pending before the Commissioner (A) as an appeal against the impugned order as on the 1 st March 2016.

The declarant is required to pay tax due along with the interest thereon and penalty equivalent to twenty-five per cent of the penalty imposed in the impugned order, within fifteen days of the receipt of the acknowledgment and intimate the designated authority within seven days of making such payment. On payment of tax, interest and penalty, the designated authority shall within fifteen days of the receipt of such proof, pass an order of discharge of dues.

There are certain exceptions to the Scheme as elaborated in clause/section 212 of the Finance Bill, 2016 viz. order relating to search and seizure; prosecution initiated before 01.06.2016; narcotic drugs and other prohibited goods; offences punishable under IPC, NDPS or Prevention of Corruption Act; detention order under COFEPOSA.

On passing of an order of discharge of dues, the appeal pending before the Commissioner (A) stands disposed of and the declarant shall get immunity from all proceedings under the Act in respect of the Indirect Tax dispute for which the declaration has been made.

This declaration shall become conclusive upon the issuance of the order and no matter relating to the impugned order shall be reopened thereafter in any proceedings under the Act before any authority or court. Obviously, this provision is not to the liking of the Department and may see some squabble!

Any amount paid by the declarant cannot be refunded. The orders do not have any binding effect.

But what about recovery of the tax etc. if the declarant fails to pay?

A notification would be issued by the Central government framing the rules for carrying out the provisions of this Scheme.

The Central government should consider bringing out an e-booklet explaining the scheme just like they had come out with a printed booklet for the KVSS, 1998…how time flies!

Had the Scheme been large hearted, it would have also accommodated those matters which were remanded to the Commissioner (A) by the CESTAT.After all, the number of such denovo matters is also a pretty figure!

And more importantly would have also embraced appeals filed before Commissioner (A) concerning pure penalty cases.

Quite possibly, after this Scheme dies, we may have another scheme that would cater to appeals filed before the CESTAT… wishful thinking!

A KVSS, 1998, Settlement Commission, Dispute Resolution Scheme, 2008 (for Service Tax),  ST VCES, 2013 & now an Indirect Tax Dispute Resolution Scheme, 2016…

Hope the Central government is able to cobble up a few hundred crores through this scheme.