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Government of India
Ministry of Finance
Department of Revenue
Central
Board of Indirect Taxes and Customs
Circular No. 1073/06/2019.CX
Dated, the 29th October, 2019
To
The Principal Chief Commissioners/ Chief Commissioners (All)
The
Principal Directors General/ Directors General (All)
Subject: Sabka
Vishwas (Legacy Dispute Resolution) Scheme, 2019-reg
Dear Madam/Sir,
I am directed to invite your attention to Board’s
Circulars No. 1071/4/2019-CX dated 27th August, 2019
and
1072/05/2019-CX dated 25th September, 2019 on the
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Subsequently, the Board
has received further references from field formations as well as from the trade
seeking certain clarifications on the Scheme.
2. The references received by the
Board have been examined, and the issues raised therein are clarified in the
context of the various provisions of the Finance (No.2) Act, 2019 and Rules made
there-under, as follows:
(i) Section 123
(c) states that ‘tax dues’ means, inter alia, where an audit is PENDING and the
amount of duty payable has been quantified on or before the 30th day of June,
2019. Some field formations are taking a view that in case the Final Audit
Report (FAR) has been issued, the audit is not pending and the benefit of the
scheme is not available. The process of audit involves issue of FAR by the Audit
Commissionerates after the MCM (Monitoring Committee Meeting). If in compliance
to the FAR, the taxpayer pays the duty, the relevant para is closed. If the
taxpayer does not comply, a SCN is issued by the Audit Commissionerate
answerable to the jurisdictional Executive Commissionerate. Till such time an
audit does not culminate in a Show Cause Notice, it is treated as pending.
Therefore, cases where Final Audit Report (FAR) has been issued on or before
30th June 2019, are eligible for relief under SVLDRS as the tax demand has been
quantified.
(ii) Under voluntary disclosure category, the Scheme makes
two exclusions: (a) not being subjected to an enquiry or investigation or audit;
or (b) having already filed a return but not paid the duty declared therein
[Section 125(f)(i) and (ii)]. Some of the formations have reported difficulty in
verifying these conditions as the proceedings may have been initiated by another
formation. Though the Scheme provides that no verification will be carried out
in cases of voluntary disclosure, they felt that there may still be a
requirement to determine the eligibility to avail the Scheme. It is clarified
that such declarations may be accepted without recourse to determination of
eligibility as the Scheme provides ample safeguards for taking suitable action
in case of false declaration of any material particular [Section 129(2)(c)].
(iii) A doubt has also been expressed whether a party who has filed an ST-3
return and has also paid the dues in FULL before filing the application but
still wants to avail the benefits of the scheme for interest on the late paid
dues is eligible. In this regard, attention is invited to illustrations (a) and
(b) under Para 2(iv) of
Circular No. 1072/05/2019-CX dated 25.09.2019, given in the
context of arrears of confirmed demand. It is clarified that these also cover
the cases of arrears of tax liability admitted under returns filed on or before
30.06.2019.
(iv) Vide
Circular No. 1072/05/2019-CX dated 25.09.2019
[Para 2(iii)], it was clarified that a separate declaration will need to be
filed for each return filed, on or before 30.06.2019 but duty not paid. For the
sake of administrative convenience, it is clarified that a person can file a
single declaration for more than one such return also. However, it will not have
any impact on the applicable tax relief. In other words, for the purpose of
application of tax relief, each such return will be taken individually even
though a single Estimate/Statement and Discharge Certificate shall be issued for
a declaration.
(v) In many cases the assets of a tax defaulter are taken over by an Asset
Reconstruction Company (ARC), and the department asks the ARCs to pay the
outstanding dues. In another case, M/s. RIICO, a PSU of State of Rajasthan, has
taken physical possession of the fixed assets of some of its borrowers who also
happen to be tax defaulters. They have reported that they may be able to realise
their dues. if they are allowed to settle the tax dues under the Scheme, and
thereby removing an encumbrance on the disposal of the fixed assets. Similarly.
M/s. Retailers Association of India have represented that in many cases,
department has initiated proceedings against lessors for non-payment of service
tax on rent on immovable property rented by their members. Hon’ble Supreme Court
has allowed the lessees to file a Civil Appeal challenging the applicability of
service tax in such matters, subject to the condition that they deposit
appropriate pre-deposit as well as the remaining dues, if the case is decided
against them eventually. It is clarified that such persons are allowed to file a
declaration under the Scheme and avail the benefits. The remaining conditions of
the Scheme such as withdrawal of pending cases etc., apart from payment of dues
as determined by the designated committee, will still need to be complied by
them.
(vi)
Representations have also been received that the cases where appeals were filed
after 30.06.2019 should also be allowed relief under the Scheme. It is stated
that such cases are not covered per se. However, if a taxpayer withdraws the
appeal and furnishes the undertaking to the department in terms of Para 2(viii)
of
Circular No. 1072/05/2019-CX dated 25.09.2019,
they can file a declaration under the Scheme.
3. Difficulty if any, in implementation of
this Circular may be brought to the notice of the Board.
F. No. 267/78/2019/CX-8-Pt.III
Yours sincerely,
(Navraj Goyal)
OSD(CX)
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