The Finance Minister in her maiden budget introduced Sabka Vishwas (Legacy Dispute Resolution) 2019 (LDRS) in order to “unload the baggage of more than INR 3.75 lakh crores blocked in litigation in service tax and excise and allow the business to move on”. This will allow quick closure of pre-GST litigation.
The objective of the scheme is to provide one time measure for liquidation of past disputes of Central Excise and Service Tax and also to provide an opportunity of voluntary disclosure to non-compliant taxpayers.
Effective Date of LDRS: The effective date will be notified in the official Gazette.
Application procedure: Applications/ declarations to opt for the scheme need to be made on the CBIC portal (https://cbic.gst.gov.in);
Benefits of the Scheme are as follows:
- Total waiver of interest, penalty and fine
- Immunity from prosecution
- Cases pending in adjudication or appeal, a relief of 70% from the duty demand if it is ₹ 50 Lakh or less and 50% if it is more than ₹ 50 Lakh
- The same relief for cases under investigation and audit where the duty involved is quantified on or before 30th June, 2019
- In case of an amount in arrears, the relief offered is 60% of the confirmed duty amount if the same is ₹ 50 Lakh or less and it is 40% in other case.
- In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty.
Key features of the scheme are as follows:
- The benefit under the scheme cannot be availed of if an audit, enquiry or investigation has started but the amount has not been quantified on or before June 30, 2019;
- If an SCN covers multiple issues, the entire amount demanded as per SCN has to be applied for as a part of the scheme;
- Matters which have been finally heard on or before June 30, 2019 cannot be opted as part of scheme;
- Within sixty days of filing of a declaration, an applicant/ declarant will be informed electronically about the final decision taken in the matter;
- Periodical SCNs also stand covered under the scheme;
- Designated Committee will give the declarant an opportunity of being heard;
- Payment under the scheme needs to be made within 30 days of the statement being issued by the Designated Committee;
- Benefit under the scheme includes waiver of interest, penalty and fines.
Synopsis of the scheme and FAQs issued by CBIC in this regard are attached for your reference.