By TIOL News Service

NEW DELHI, JULY 5, 2019: JUST before concluding her maiden budget speech, the Hon'ble Finance Minister mentioned the following -

141. GST has just completed two years. An area that concerns me is that we have huge pending litigations from pre-GST regime. More than Rs.3.75 lakh crore is blocked in litigations in service tax and excise. There is a need to unload this baggage and allow business to move on. I, therefore, propose, a Legacy Dispute Resolution Scheme that will allow quick closure of these litigations. I would urge the trade and business to avail this opportunity and be free from legacy litigations.

The Finance Bill, 2019 in Chapter V [Clause 119 to 134] lays down the road map for the Dispute Resolution Scheme.

During the Parliamentary Party Meeting of the NDA, the Prime Minister said - "We are for the 130 crore people of the country, we cannot differentiate between anyone. We cannot differentiate on the basis caste and religion or region. We have shown how to achieve Sabka Saath, Sabka Vikas (development for all) and now we have to win Sabka Vishwas (trust of everyone). We are for the people who trusted us and those whose trust we need to win. Nobody should be 'other' for us. It takes a lot of strength to try and win the hearts of people."

The Dispute Resolution Scheme apparently takes a leaf out of the new slogan coined and is titled Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Netizens may be aware of the Kar Vivad Samadhan Scheme of the year 1998 which allowed an assessee to voluntary settle his indirect tax dues outstanding as on 31.03.1998 by payment of 50% of the pending tax arrears and providing immunity against institution of prosecution and penalty. The VCES, 2013 for Service Tax was the last such scheme.

The new Dispute Resolution Scheme in respect of legacy disputes pertaining to Central Excise and Service Tax follows on this path with many similar provisions.

Excepting of course, that there are certain distinguishing features.

Inasmuch as the relief available to a declarant under the Scheme shall be calculated as below –

+ Where the tax dues are relatable to a SCN or one or more appeals arising out of such notice and which is pending as on 30th 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.

+ 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

The above percentage (of relief) is also available where the tax dues are relatable to an amount in arrears and reflected in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it.

+ Where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th June 2019 is –

(i) rupees fifty lakhs or less, then, seventy per cent of the tax dues;

(ii) rupees more than fifty lakhs, then, fifty per cent of the tax dues

Interestingly, 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.

Importantly, if the amount of pre-deposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated by the designated committee, the declarant shall not be entitled to any refund.

Lest it be forgotten, it is a VOLUNTARY SCHEME. And, there are Rules to be framed, designated Committees to be set up and all this would come in to force on an appointed date after enactment of the Finance Bill, 2019 and the Central Government issuing a notification in this regard.

More about this Vishwas scheme follows…