SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019

• This scheme is for quick closure and dispute resolution of legacy cases.
• It is extended to all persons and shall come into force on such date to be notified by the Central Government may, in the Official Gazette.

This Scheme shall be applicable to the following enactments along with applicable rules made thereunder, namely:—

• IMPORTANT DEFINITIONS AND TERMS USED IN THE SCHEME

  • In this Scheme, unless the context otherwise requires,
    • “amount declared” means the amount declared by the declarant under section 124;
    • “amount estimated” means the amount estimated by the designated committee under section 126;
    • “amount in arrears” means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of—
      1. no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal; or
      2. an order in appeal relating to the declarant attaining finality; or
      3. the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it;
    • “amount of duty “ means the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment;
    • “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 this Scheme and shall be calculated as the amount of tax dues less the tax relief;
    • “appellate forum” means the Supreme Court or the High Court or the Customs, Excise and Service Tax Appellate Tribunal or the Commissioner (Appeals);
    • “audit” means any scrutiny, verification and checks carried out under the indirect tax enactment, other than an enquiry or investigation, and will commence when a written intimation from the central excise officer regarding conducting of audit is received;
    • “departmental appeal” means the appeal filed by a central excise officer authorised to do so under the indirect tax enactment, before the appellate forum;
    • “discharge certificate” means the certificate issued by the designated committee under section 126;
    • ‘‘enquiry or investigation’’, under any of the indirect tax enactment, shall include the following actions, namely:—
      1. search of premises;
      2. issuance of summons;
      3. requiring the production of accounts, documents or other evidence;
      4. recording of statements;
    • “order” means an order of determination under any of the indirect tax enactment, passed in relation to a show cause notice issued under such indirect tax enactment;
    • “order in appeal” means an order passed by an appellate forum with respect to an appeal filed before it;
    • “person” includes—
      1. an individual;
      2. a Hindu undivided family;
      3. a company;
      4. a society;
      5. a limited liability partnership;
      6. a firm;
      7. an association of persons or body of individuals, whether incorporated or not;
      8. the Government;
      9. a local authority;
      10. an assessee as defined in rule 2 of the Central Excise Rules, 2002;
      11. every artificial juridical person, not falling within any of the preceding clauses.
    • ‘‘quantified”, with its cognate expression, means a written communication of the amount of duty payable under the indirect tax enactment;
    • “tax relief” means the amount of relief granted under section 123;
    • all other words and expressions used in this Scheme, but not defined, shall have the same meaning as assigned to them in the indirect tax enactment and in case of any conflict between two or more such meanings in any indirect tax enactment, the meaning which is more congruent with the provisions of this Scheme shall be adopted.
  • o tax dues” means—
    1. where—
       1. a single appeal arising out of an order is pending as on the 30/June/2019 before the appellate forum, the total amount of duty which is being disputed in the said appeal;
       2. 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 30/June/2019 before the appellate forum, the sum of the amount of duty which is being disputed by the declarant in his appeal and the amount of duty being disputed in the departmental appeal: Provided that nothing contained in the above clauses shall be applicable where such an appeal has been heard finally on or before the 30/June/ 2019.

          Illustration 1: The show cause notice to a declarant was for an amount of duty of ₹ 1000 and an amount of penalty of ₹ 100. The order was for an amount of duty of ₹ 1000 and amount of penalty of ₹ 100. The declarant files an appeal against this order. The amount of duty which is being disputed is ₹ 1000 and hence the tax dues are ₹ 1000.

          Illustration 2: The show cause notice to a declarant was for an amount of duty of nbsp;₹ 1000 and an amount of penalty of ₹ 100. The order was for an amount of duty of ₹ 900 and penalty of ₹ 90. The declarant files an appeal against this order. The amount of duty which is being disputed is ₹ 900 and hence tax dues are ₹ 900.

          Illustration 3: The show cause notice to a declarant was for an amount of duty of ₹ 1000 and an amount of penalty of ₹ 100. The order was for an amount of duty of ₹ 900 and penalty of ₹ 90. The declarant files an appeal against this order of determination. The departmental appeal is for an amount of duty of ₹ 100 and penalty of ₹ 10. The amount of duty which is being disputed is ₹ 900 plus ₹ 100 i.e ₹ 1000 and hence tax dues are ₹ 1000.

          Illustration 4: The show cause notice to a declarant was for an amount of duty of ₹ 1000. The order was for an amount of duty of ₹ 1000. The declarant files an appeal against this order of determination. The first appellate authority reduced the amount of duty to ₹ 900. The declarant files a second appeal. The amount of duty which is being disputed is ₹ 900 and hence tax dues are ₹ 900;

    2. where a show cause notice under any of the indirect tax enactment has been received by the declarant on or before the 30/June/2019, then, the amount of duty stated to be payable by the declarant in the said notice: Provided that if the said notice has been issued to the declarant and other persons making them jointly and severally liable for an amount, then, the amount indicated in the said notice as jointly and severally payable shall be taken to be the amount of duty payable by the declarant;
    3. where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30/June/2019;
    4. where the amount has been voluntarily disclosed by the declarant, then, the total amount of duty stated in the declaration;
    5. where an amount in arrears relating to the declarant is due, the amount in arrears.
  • Relief under SV(LDR) Scheme

Subject to the conditions specified in sub-section (2) of Sec 123, the relief available to a declarant under this Scheme shall be calculated as follows:

• The relief calculated under sub-section (1) shall be subject to the condition that
  • 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 deducted when issuing the statement indicating the amount payable by the declarant:
  • Provided that if the amount of pre-deposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund.
• Ineligibilty to apply for SV(LDR) Scheme
  1. a person who has filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30 June 2019
  2. a person who has been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration;
  3. a person who has been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30 June 2019
  4. a person who has been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;
  5. a person who has 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;
  6. a person making a voluntary disclosure,—
     1. after being subjected to any enquiry or investigation or audit; or
     2. having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it;
  7. a person who has filed an application in the Settlement Commission for settlement of a case;
  8. persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;
• Other Features
  • A declaration shall be made in such electronic form as may be prescribed.
  • The designated committee shall verify the correctness of the declaration made by the declarant under section 124 in such manner as may be prescribed:
  • Provided that no such verification shall be made in case where a voluntary disclosure of an amount of duty has been made by the declarant.
  • Where the amount estimated to be payable by the declarant, as estimated by the designated committee, equals the amount declared by the declarant, then, the designated committee shall issue in electronic form, a statement, indicating the amount payable by the declarant, within a period of 60 days from the date of receipt of the said declaration.
  • Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimate of the amount payable by the declarant within 30 days of the date of receipt of the declaration.
  • After the issue of the estimate under sub-section (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant: Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee.
  • After hearing the declarant, a statement in electronic form indicating the amount payable by the declarant, shall be issued within a period of 60 days from the date of receipt of the declaration.
  • The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of 30 days from the date of issue of such statement.
  • 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, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn.
  • Where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax dues, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the Court, he shall furnish proof of such withdrawal to the designated committee, in such manner as may be prescribed, along with the proof of payment.
  • Issue of Discharge Certificate - On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within 30 days of the said payment and production of proof.
  • Modification of Order - Within 30 days of the date of issue of a statement indicating the amount payable by the declarant, the designated committee may modify its order only to correct an 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, by the designated committee.
  • Discharge Certificate - Conclusive Evidence of Closure of Legacy Matter
  • Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conclusive as to the matter and time period stated therein, and–
    1. the declarant shall not be liable to pay any further duty, interest, or penalty with respect to the matter and time period covered in the declaration;
    2. the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration;
    3. no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment.
  • In a case of voluntary disclosure where any material particular furnished in the declaration is subsequently found to be false, within a period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted.
  • Payment options and treatment of amount paid in various circumstances
    1. shall not be paid through the input tax credit account under the indirect tax enactment or any other Act;
    2. shall not be refundable under any circumstances;
    3. shall not, under the indirect tax enactment or under any other Act,—
       1. be taken as input tax credit; or
       2. entitle any person to take input tax credit, as a recipient, of the excisable goods or taxable services, with respect to the matter and time period covered in the declaration.
  • In case any pre-deposit or other deposit already paid exceeds the amount payable as indicated in the statement of the designated committee, the difference shall not be refunded.
  • The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Scheme.
  • Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
    1. the form in which a declaration may be made and the manner in which such declaration may be verified;
    2. the manner of constitution of the designated committee and its rules of procedure and functioning;
    3. the form and manner of estimation of amount payable by the declarant and the procedure relating thereto;
    4. the form and manner of making the payment by the declarant and the intimation regarding the withdrawal of appeal;
    5. the form and manner of the discharge certificate which may be granted to the declarant;
    6. the manner in which the instructions may be issued and published;
    7. any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules.

1. UT = Union Territory
2. Monthly return for aggregate turnover exceeding ₹1.50 crore. Quarterly returns for the other taxpayers. Refer Notification No. 57/2017-Central Tax dated 15.11.2017.
3. Due date for filing GSTR has been extended or newly notified vide Notifications 18, 20, 21, 26, 27, 35, 56, 72/2017; 2, 17, 18, 32, 33, 37, 38, 43, 44, 63, 64, 71, 72/2018; 11, 12, 17, 23, 24, 27/2019 [Latest notifications must be checked to comply with the due dates]
4. Form not applicable till GST return for period ending June, 2019
5. In case of expiry of validity of registration, return to be filed within 7 days of expiry of registration.
6. Section 39 (8)
7. Rule 62 (4) of CGST Rules, 2017.
8. OIDAR – Online Information Data Access or Retrieval Services
9. Section 14 of IGST Act, 2017
10. Section 24 (xi) of CGST Act, 2017
11. Rule 66 (3) of CGST Rules, 2017
12. Section 25 (9) of CGST Act, 2017
13. Refund shall be available only in case of inward supplies from registered persons against a tax invoice and the price of the supply covered by a single tax invoice is greater than Rs. 5,000 [Rule 95 (3)]
14. Section 55 of CGST Act, 2017
15. Rule 95 (1) of CGST Rules, 2017