The Sabka Vishwas (Legacy Dispute Resolution) Scheme is a one-time measure for liquidation of past disputes of Central Excise and Service Tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration.
The scheme comes with a validity of 4 months starting from September 1, 2019 to December 31, 2019. It provides that eligible persons shall declare the tax dues and pay the same in accordance with the provisions of the Scheme. It further provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1944 to those persons who pay the declared tax dues.
The scheme aims to resolve nearly 1.5 lakh cases involving an amount of ₹3.75 lakh crore pending before Commissioner (Appeals), CESTAT, High Courts and the Supreme Court. These cases are related with Central Excise Duty, Services Tax and central cesses which have now been subsumed in Goods & Services Tax.
The scheme was announced in the Budget which prescribes total waiver of interest, penalty and fine in all cases and immunity from prosecution. In cases pending in adjudication or appeal, a relief of 70 per cent from the duty demand if it is ₹50 lakh or less and 50 per cent, if it is more than ₹50 lakh has been proposed. The same relief is available for cases under investigation and audit where the duty involved is quantified on or before June 30, 2019.
In case of an amount in arrears, the relief is 60 per cent of the confirmed duty amount if the same is ₹50 lakh or less and it is 40 per cent in other cases. In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty.
The Designated Committee will give an opportunity to the declarant of being heard, in case of a disagreement. The declarant will pay the settled amount electronically within a period of 30 days of the statement issued by the Designated Committee.
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other than the Supreme Court or the High Court, then, such appeal or reference or reply will be deemed to have been withdrawn. Also, the declarant will have to withdraw writ petitions filed in High Court/Supreme Court.
It's a really good offer where the Trade is in doubt as to they will win or lose and to clean their old baggage of past cases involving taxes which have got subsumed in GST, namely Central Excise, Service Tax and cesses besides demand under almost 26 enactments.
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