Q.1. From which date this scheme will come into effect?
Ans-The effective date of the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 is 01.09.2019.
Q.2. What are the statutes covered under the Scheme?
Ans. This Scheme is 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.|
Q.3. Who is eligible to avail benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019?
Ans. All persons are eligible to opt for the scheme. Except the below mentioned-
- 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;
- who have been convicted for any offence punishable for the matter for which he intends to file a declaration;
- who have been issued a show cause notice and the final hearing has taken place on or before the 30th day of June, 2019;
- who have been issued a show cause notice for an erroneous refund or refund;
- 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;
- a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit; or
- a person making a voluntary disclosure after having filed a return wherein he has indicated an amount of duty as payable, but has not paid it;
- who have filed an application in the Settlement Commission for settlement of a case;
- Persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944.
Q.4. What is relief proposed by LDRS?
Ans. Relief proposed by LDRS is as follows:
Q.5. What is the meaning of ‘Tax dues’ here?
Ans. Situation: 1 Where a single appeal arising out of an order is pending as on the 30th day of June, 2019 before the appellate forum
For Ex: – . A SCN has been issued to me for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. In the Order in Original (OIO) the duty confirmed is of Rs.1000 and an amount of Rs.100 has been imposed as penalty. I have filed an appeal against this order before the Appellate Authority. In that case the amount of duty which is being disputed is Rs.1000 and hence the tax dues will be Rs.1000.
Situation: 2 Where 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
For Ex: – A SCN has been issued for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. In the OIO the duty confirmed is of Rs.900 and penalty imposed is Rs.90. I have filed an appeal against this order before the Appellate Authority. Further, Department has also filed an appeal before the Appellate Authority for an amount of duty of Rs.100 and penalty of Rs.10.In that case 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.
For Ex: – A SCN has been issued for an amount of duty of Rs.1000. The Adjudicating Authority confirmed the duty of Rs.1000. I have filed an appeal against this order. The first appellate authority Commissioner Appeals/CESTAT reduced the amount of duty to Rs.900. I have filed a second appeal (before CESTAT/High Court. The department has not filed any appeal. In that case the amount of duty which is being disputed is Rs.900 and hence the tax dues are Rs.900.
Q.5. Shall the pre-deposit paid at any stage of appellate proceedings and deposit paid during enquiry, investigation or audit be taken into account for calculating relief under the Scheme?
Ans. Yes, 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 adjusted while issuing the statement indicating the amount payable by the declarant.
Q.6. Can amount payable under LDRS be paid through Input tax credit?
Ans. Amount payable under LDRS shall not be paid by utilizing input tax credit account under the indirect tax enactment or any other Act.
Thus, it appears that the payment is to be discharged in cash. Although if any pre-deposit has been deposited then for such amount ITC shall be allowed.
Q.7. Whether tax discharged under Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 can be claimed as ITC?
Ans. The taxdischarged under LDRS cannot be claimed as ITC
Q.8. What procedure will be followed for withdrawal of appeals where the person has filed a declaration under the Scheme?
Ans. Where the declarant has filed an appeal or reference 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, such appeal or reference or reply shall be deemed to have been withdrawn.
In case of a writ petition or appeal or reference before any High Court or the Supreme Court, the declarant shall file an application before such High Court or the Supreme Court for withdrawing the writ petition, appeal or reference and after its withdrawal with the leave of the Court, he shall furnish proof of such withdrawal to the Designated Committee.
Q.9. If a SCN covers multiple issues, whether the person can file an application under the Scheme for only few issues covered in the SCN?
Ans. No. A person cannot opt to avail benefit of the Scheme in respect of selected matters. He must file a declaration in respect of all the matters concerning duty/tax liability covered under the SCN.
Q.10. Whether the declarant will be given an opportunity of being heard or not?
Ans. Yes, as per section 127(2) and (3), after the issue of the estimate, the Designated Committee shall give an opportunity of being heard to the declarant, if he so desires, in case of a disagreement.
So we have discussed some major points of this scheme, but if we take a case of company and director where director has been convicted for an offence so in that case can relief under this scheme to be given? Department needs to clarify few points so that better understanding can be established apart from that this is very good initiative and assessee should opt for this scheme if they consider it fit for their purpose. The deadline of this scheme is 31.12.2019.