Dispute Resolution and Amnesty Scheme to enable businesses to settle disputes on Indirect Tax within four months

The Finance Ministry has notified a Sabka Vishwas - Legacy Dispute Resolution Scheme announced by Finance Minister Nirmala Seetharaman which will come into effect from 1st September 2019. This would enable businesses to settle their Indirect Taxes disputes within four months.

As per the statement of the Finance Ministry, the two main components of the Scheme are dispute resolution and amnesty. The dispute resolution component is aimed at liquidating the legacy cases of Central Excise and Service Tax that are subsumed in GST and are pending in litigation at various forums. The amnesty component of the Scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any other consequence under the law.

According to the Ministry, the Scheme is provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine and penalty. In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.

According to the official statement of the Ministry, the Scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration.

For all the cases pending in adjudication or appeal in any forum, the Scheme offers a relief of 70% from the duty demand if it is Rs.50 lakhs or less and 50% if it is more than Rs. 50 lakhs. Further, in cases of confirmed duty demand, where there is no appeal pending, the relief offered is 60% of the confirmed duty amount if the same is Rs. 50 lakhs or less and it is 40%, if the confirmed duty amount is more than Rs. 50 lakhs. Finally, in cases of voluntary disclosure, the person availing the Scheme will have to pay only the full amount of disclosed duty.

With this move, a large number of taxpayers to sign up for the scheme and close their pending disputes.