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Indirect tax amnesty scheme to be fully automated

Dipak Mondal     September 11, 2019

The amnesty-cum-dispute resolution scheme - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - will be fully automated with a dedicated portal for online filing of declaration and communication of the final decision, a circular from the Central Board of Indirect Taxes and Customs (CBIC) has clarified.

The circular clarifies that that the scope of discretion by tax officials will be minimum under the scheme as calculation of exemptions and waivers are going to be automated.

Laying out the procedure, the circular says that relief under the scheme would be linked to the amount of tax which is already known to both the taxpayer and the department in the form of a show-cause notice/order of determination or written communication.

In cases where the disclosure is voluntary, no verifications will be carried out by the department.

In a major clarification, the department has said that a declarant cannot partially apply for a foreclosure and if a show-cause notice covers multiple matters, he/she has to file a declaration for all the matters concerning duty liability covered under the show cause notice.

Cases under investigation by the intelligence unit of the indirect tax department and where the tax liability relates to more than one commissionerate (jurisdiction), a designated committee of the commissionerate involving maximum amount would decide the case.

The designated committee will have to decide on a declaration filed by a taxpayer within 60 days. In case of voluntary disclosure where no verification is required, such cases are expected to be finalised within 15 days of filing.

The scheme gives a window to tax litigants to settle any pre-GST indirect tax-related disputes. It covers disputes under central excise, service tax and specified cesses including education cess, krishi kalyan cess and swachh bharat cess. According to the government, around Rs 3.75 lakh crore is stuck in such disputes. The scheme comes with a validity of four months starting from September 1, 2019 to December 31, 2019

The scheme waives up to 70 per cent of the tax dues and 100 per cent of interest and penalty. If the tax dues are up to Rs 50 lakh, the scheme offers to waive 70 per cent of the dues and if the tax dues are more than Rs 50 lakh then the waiver is 50 per cent. Over 60 per cent of dues, which are recoverable as arrears (matters have attained finality) will be waived if the tax involved is up to Rs 50 lakh and 40 per cent if the amount involved is more than Rs 50 lakh.

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