By TIOL News Service

NEW DELHI, 06, JULY 2019 : THE Finance Bill (No. 2), 2019 in Chapter V [Clause 119 to 134] lays down the road map for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

The SVS, 2019 is meant only for liquidating the pending litigation pertaining to Service Tax and Central Excise and the Cess payable under the Indirect Tax enactment (listed in clause 121).

The cut-off date of the tax dues is 30 th June 2019 meaning to say that the SCN should be pending as on this date or the appeal filed before Commissioner(A) or CESTAT should be pending on this date.

If the show cause notice or the appeal has been "heard finally" on or before the 30 th June 2019, then the 'person' cannot make a declaration under the Scheme.

What is meant by "heard finally" is not forthcoming.

If no order is passed after the hearing, does it mean that it has not been "heard finally"?

And, what if the matter is remanded by the Commissioner(Appeals) or CESTAT?

Persons who have filed application for settlement of their case before the Settlement Commission are excluded from the largesse of the SVS, 2019. [clause 124(1)(g) refers]

Erroneous refund cases are also outside the ambit of SVS, 2019. The clause 124(1)(d) reads - who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund :

Erroneous refund SCN is understandable but "SCN for refund"?

Does the clause refer to the SCN issued after an assessee/person files a refund claim?

The declaration to be filed in 'electronic form' is to be prescribed.

The correctness of the declaration filed would be verified by the designated committee in the manner prescribed.

No such verification is mandated by the designated committee where a voluntary disclosure of an amount of duty has been made by the declarant. Interestingly, where the tax dues are payable on account of voluntary disclosure by the declarant, no relief is available under the SVS, 2019 with respect to tax dues .

Nonetheless, immunity from penalty, interest and prosecution would be extendable, although not mentioned expressly.

The composition and functioning of the designated committee would be prescribed.

If the amount estimated to be payable by the declarant and as estimated by the designated committee is the same, then the designated committee shall issue, in electronic form, a statement, within a period of sixty days from the date of receipt of declaration, indicating the amount payable by the declarant.

If the amount estimated as payable by designated committee exceeds the amount as estimated by the declarant, then the designated committee shall communicate the said estimated payable amount within thirty days of the declaration and if the declarant so desires, an opportunity of being heard would be provided before issuing the statement of 'amount payable'. A single adjournment may be granted by the designated committee upon "sufficient cause" being shown.

After hearing, a statement in electronic form indicating the "amount payable" would be issued within a period of sixty days from the date of receipt of declaration.

The declarant is required to pay the "amount payable" through Internet banking within thirty days from the "date of issue of such statement".

What would be happen if the date of issue of such statement is not the date on which the declarant comes to know about the 'statement'? [For example, a declarant unable to access electronic communication, emails, poor net connectivity etc.]

Lest one forgets, the "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 the SVS, 2019 and shall be calculated as the amount of tax dues less the "tax relief". [clause 120(e) refers].

The amount paid as pre-deposit at any stage of appellate proceedings or as deposit during enquiry, investigation or audit shall be deducted while issuing the statement indicating the "amount payable". In case the amount already paid exceeds the "amount payable", the declarant is not entitled to any refund. [clause 123(2) proviso refers]. The same averment is also made in clause 129(2) of the Finance (No. 2) Bill, 2019.

Strangely, it is unclear as to whether the amount of "pre-deposit or deposit made" is to be first reduced from the "tax dues" before calculating the relief and thereafter computing the "amount payable".

Remember KVSS, 1998!

The "amount payable" cannot be paid through CENVAT Credit/ITC under the indirect tax enactment or any other Act. The "amount payable" is NOT REFUNDABLE AND IS NOT CENVATABLE.

What if the "amount payable" is not paid? Nothing, one may say, the pending proceedings are set rolling once again. Remember ST VCES, 2013 had a provision for recovery of the said dues.

On payment of the "amount payable" and production of proof of withdrawal of appeal (from the High Court or Supreme Court), the designated committee would issue a "discharge certificate" within a period of thirty days.

What if such a proof of withdrawal is not furnished? Will the benefit under the Scheme be denied?

Insofar as appeal before Commissioner(A)/CESTAT is concerned, they are deemed to have been withdrawn once a declaration is filed under SVS, 2019.

The designated committee can modify its statement indicating the "amount payable" only to correct any 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 . [clause 127 refers]

The department seems to have been precluded from pointing out such errors.

The "discharge certificate" is conclusive as to the matter and time period stated therein and the declarant would not be liable to pay any further duty, interest or penalty with respect to the matter and time period covered in the declaration. He will not be liable for prosecution in this matter and no matter and time period covered by such declaration can be reopened in any other proceeding under the indirect tax enactment. [clause 128(1) refers]

Rule making powers are envisaged in clause 131, clarification/instructions/directions issuing powers are given to CBIC in clause 132 and the Central Government is empowered to issue 'removal of difficulty' orders in clause 133. Protection to officers (except in case of misconduct for which evidence is available) for anything which is done in good faith, in pursuance of this Scheme or any rule is available in terms of clause 134.

By the way, why is it that the clause 120(q)(x) refers to rule 2 of the Central Excise Rules, 2002 while inclusively defining the term "person". It could have been the CER, 1944, CER, 2001, CER, 2002 or for that matter CER, 2017, all of them.

Hopefully, there would be a SVS, 2019 booklet brought out by the CBIC just as it did for the KVSS, 1998 and a couple of clarifications along with the rules, not to speak of seminars, advertisements, handouts and what not.

For every problem, there is a solution that is simple, elegant, and wrong - Anon