Centre unlikely to extend 'Sabka Vishwas Scheme' beyond December 31

New Delhi: Finance Minister Nirmala Sitharaman after a meeting with the private sector banks, in New Delhi, Thursday, Sept. 26, 2019. (PTI Photo/Kamal Singh)

The finance ministry is unlikely to extend the last date for 'Sabka Vishwas Scheme', a dispute resolution-cum-amnesty scheme for settling pending disputes of service tax and central excise, which is ending on December 31.

Finance Minister Nirmala Sitharaman had unveiled the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, with the objective of settling pending disputes of Service Tax and Central Excise in the Budget.

Live since September 1, the Sabka Vishwas Scheme provides a one-time window to eligible persons to declare their tax dues and pay the same in accordance with the provisions.

If anyone is interested to utilise the benefits of the Sabka Vishwas Scheme 2019, he or she must apply by December 31 as the last date will not be extended further, a senior finance ministry official said.

So far, the scheme has attracted substantial attention and positive response, official said adding that 55,693 applications have been received with tax dispute amounting to Rs 29,557.3 crore as on date.

While launching the scheme, it was seen that a total Rs 3.6 lakh crore is locked up in 1.83 lakh cases at various quasi-judicial, appellate and judicial forums under Service Tax and Central Excise put together.

The Central Board of Indirect Taxes and Customs (CBIC) has asked its principal chief commissioners to be more proactive in persuading eligible taxpayers to take benefit of the Sabka Vishwas Scheme.

The relief under the scheme varies from 40 per cent to 70 per cent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved. The scheme also provides relief from payment of interest and penalty.

For voluntary disclosures, the relief is regarding waiver of interest and penalty on payment of full tax dues disclosed. The person discharged under the scheme shall also not be liable for prosecution.

The CBIC has made it clear that the performance of the field formations would be adjudged in terms of their outreach and ability to persuade the taxpayers to avail the scheme.

The principal chief commissioners or chief commissioners of CGST, who have the information of eligible taxpayers readily available with them have been asked to proactively contact these taxpayers numbering about 1.8 lakh, official said.

This includes cases under investigation, adjudication as well as arrears of confirmed demand. These cases invariably drag on for years, burdening the taxpayers especially those in the micro, small and medium enterprises (MSME) sector.

The introduction of the goods and services tax (GST) that has subsumed these legacy taxes has given an opportunity to the government and also to taxpayers to settle these cases.

Official sources said that under this scheme, relief is to the tune of 70 per cent of the duty involved if it is Rs 50 lakh or less and 50 per cent if it is more than Rs 50 lakh.

This is for cases pending in adjudication or appeal or in investigation and audit in latter cases, the duty involved must be quantified and communicated or admitted by the taxpayer in a statement on or before June 30, 2019.

In cases of outstanding arrears of revenue, the relief is 60 per cent of the duty amount if it is Rs 50 lakh or less and 40 per cent if it is more than Rs 50 lakh, officials said.

In all cases, there is full waiver of interest and penalty and exemption from prosecution. There are, however, some exclusions such as those convicted in the same case, officials added.

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