Frequently Asked Questions on SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019 – Part II

1. If an enquiry or investigation or audit has started but the tax dues have not been quantified whether the person is eligible to opt for the Scheme? 

No. If an audit, enquiry or investigation has started, and the amount of duty/duty payable has not been quantified on or before 30^th June, 2019, the person shall not be eligible to opt for the Scheme.

2. If a SCN covers multiple issues, whether the person can file an application under the Scheme for only few issues covered in the SCN? 

No. A person cannot opt to avail benefit of the Scheme in respect of selected matters. He must file a declaration in respect of all the matters concerning duty/tax liability covered under the SCN.

3. What is the scope of duty/tax relief covered under section 124(1)(b) with respect to SCN for late fee and penalty only where the amount of duty/tax in the said notice has been paid or is nil? 

  The relief shall be of the entire amount of late fee or penalty.

4. I have filed an appeal before the appellate forum [Commissioner (Appeals) /CESTAT] and such appeal has been heard finally on or before the 30th day of June, 2019. Am I eligible for the Scheme? 

  No, you are not eligible in view of section 125(1)(a).

5. What is the scope under the Scheme when adjudication order determining the duty/tax liability is passed and received prior to 30.06.2019, but the appeal is filed on or after 01.07.2019? 

  Such a person shall not be eligible to file a declaration under the Scheme.

6. I have been convicted for an offence punishable under a provision of the indirect tax enactment. Am I eligible for the Scheme? 

If the conviction is for the same matter and time period for which the declaration is proposed to be filed, then you are not eligible to avail the Scheme.

7.           I have been issued a SCN and the final hearing has taken place on or before 30.06.2019. Am I eligible for the Scheme? 

  No, you are not eligible as per section 125(1)(c).

8. I have been issued a SCN for an erroneous refund or refund. Am I eligible for the Scheme? 

No, as per section 125(1)(d) you are not eligible to make a declaration under the Scheme in respect of an SCN issued for an erroneous refund or refund. 

9. I have been subjected to an enquiry or investigation or audit and the amount of duty/tax involved therein has not been quantified on or before 30.06. 2019. Am I eligible for the Scheme? 

No, as per section 125(1)(e) you are not eligible to file a declaration in respect of such an enquiry or investigation or audit.

10. I have been subjected to an enquiry or investigation or audit under indirect tax enactment and I want to make a voluntary disclosure regarding the same. Am I eligible for the Scheme? 

No, you are not eligible to make a declaration under the voluntary disclosure category as per section 125(1)(f)(i).

11. There is an apparent contradiction between the provisions of section 125(1)(f)(ii) and section 124(1)(c)(iii). Can you elaborate? 

Section 125(1)(f)(ii) is an exception to voluntary disclosure category. In other words, a person having filed a return but has not deposited the duty/tax cannot make a voluntary disclosure in respect of the same since the liability already stands disclosed to the Department. On the other hand, section 124(1)(c)(iii) is a sub-set of the ‘arrears’ category, meaning thereby that in respect of such return a declaration can only be filed under the arrears category. As such, there is no contradiction between the two provisions.

12. I have filed an application in the Settlement Commission for settlement of the case. Am I eligible for the Scheme? 

No, you are not eligible to file a declaration for a case which is still pending with the Settlement Commission.

13. I deal with the goods which are presently under Central Excise and are mentioned in the Fourth Schedule to the Central Excise Act, 1944. I want to make declarations with respect to these excisable goods. Am I eligible for the Scheme? 

 No, you are not eligible to avail the benefits under the Scheme.

14. How will I apply for the said Scheme? 

All eligible persons are required to file an electronic declaration at the portal https://cbic-gst.gov.in in Form SVLDRS 1.

15. Will I get an acknowledgement for filing a declaration electronically? 

Yes, on receipt of your declaration, an auto acknowledgement bearing a unique reference number will be generated by the system and sent to you. This unique number will be useful for all future references. The declaration will automatically be routed to the Designated Committee that will finalize your case.

16. How will I come to know about the final decision taken by the designated committee on my declaration? 

Within sixty days of filing of a declaration, you will be informed electronically about the final decision taken in the matter.

17. What is the difference between ‘Tax Dues’ and ‘Tax Relief’? 

‘Tax Dues’ is the total outstanding duty/tax demand. ‘Tax Relief’ is the concession the Scheme offers from the total outstanding duty demand.

18. A SCN has been issued to me for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. In the Order in Original (OIO) the duty confirmed is of Rs.1000 and an amount of Rs.100 has been imposed as penalty. I have filed an appeal against this order before the Appellate Authority. What will be the tax dues for me? 

The amount of duty which is being disputed is Rs.1000 and hence the tax dues will be Rs.1000.

19. A SCN has been issued to me for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. In the OIO the duty confirmed is of Rs.900 and penalty imposed is Rs.90. I have filed an appeal against this order. The department has not filed any appeal in the matter. What would be the tax dues? 

The amount of duty which is being disputed is Rs.900 and hence the tax dues are Rs.900.

20. A SCN has been issued for an amount of duty of Rs.1000 and an amount of penalty of Rs.100. In the OIO the duty confirmed is of Rs.900 and penalty imposed is Rs.90. I have filed an appeal against this order before the Appellate Authority. Further, Department has also filed an appeal before the Appellate Authority for an amount of duty of Rs.100 and penalty of Rs.10. What would be the tax dues? 

  The amount of duty which is being disputed is Rs.900 plus Rs.100 i.e.Rs.1000 and hence tax dues are Rs.1000.

21. A SCN has been issued for an amount of duty of Rs.1000. The Adjudicating Authority confirmed the duty of Rs.1000. I have filed an appeal against this order. The first appellate authority Commissioner Appeals/CESTAT reduced the amount of duty to Rs.900. I have filed a second appeal (before CESTAT/High Court. The department has not filed any appeal. What will be the tax dues for me? 

The amount of duty which is being disputed is Rs.900 and hence the tax dues are Rs.900.

22. I have been issued a SCN under any of the indirect tax enactment on or before 30.06.2019, what will be the tax dues? 

As per section 123(b), the tax dues will be the amount of duty/tax/cess stated to be payable in the SCN.

23. What is the coverage of SCNs under the Scheme with respect to main noticee vis-à-vis co-noticee particularly when the tax amount has already been paid by the main notices outside the Scheme? 

In case of a SCN issued to an assessee demanding duty/tax and also proposing penal action against him as well as separate penal action against the co-noticee/s specified therein, if the main noticee has settled the tax dues, the co-noticee/s can opt for the Scheme for the waiver of penalty. For instance, the main noticee has settled the matter before the Settlement Commission and paid the dues and the co-noticees were not a party to the proceedings. In such a case, the co-noticees can file a declaration under the Scheme.

24. What is the scope of coverage of periodical SCNs under the Scheme? 

Any SCN issued whether main or periodical, where the final hearing has not taken place on or before 30.06.2019 is eligible under the Scheme.

25. What are the benefits available under the Scheme? 

The various benefits available under the Scheme are: 

• Total waiver of interest and penalty 

• Immunity from prosecution 

• In cases pending in adjudication or appeal, a relief of 70% from the duty/tax demand if it is Rs. 50 lakhs or less and of 50%, if it is more than Rs. 50 lakhs. The same relief is available for cases under enquiry, investigation and audit where the duty involved is quantified on or before 30.06.2019. 

• In case of an amount in arrears, the relief is 60% of the confirmed duty/tax amount if the same is Rs. 50 lakhs or less and it is 40% in other cases. 

• In cases of voluntary disclosure, the declarant will have to pay full amount of disclosed duty/tax.

26. Shall the pre-deposit paid at any stage of appellate proceedings and deposit paid during enquiry, investigation or audit be taken into account for calculating relief under the Scheme? 

 Yes, any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be adjusted while issuing the statement indicating the amount payable by the declarant. 

27. Whether the declarant will be given an opportunity of being heard or not? 

Yes, as per section 127(2) and (3), after the issue of the estimate, the Designated Committee shall give an opportunity of being heard to the declarant, if he so desires, in case of a disagreement.

28. What will be procedure and time period of payment to be made by the declarant? 

The declarant shall pay electronically within 30 days of the statement issued by the Designated Committee, the amount payable as indicated therein.

29. What procedure will be followed for withdrawal of appeals where the person has filed a declaration under the Scheme? 

 Where the declarant has filed an appeal or reference against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court, then, such appeal or reference or reply shall be deemed to have been withdrawn. 

In case of a writ petition or appeal or reference before any High Court or the Supreme Court, the declarant shall file an application before such High Court or the Supreme Court for withdrawing the writ petition, appeal or reference and after its withdrawal with the leave of the Court, he shall furnish proof of such withdrawal to the Designated Committee.

30. Whether any certificate will be provided to declarant as proof to payment of dues? 

Yes, on payment of the amount indicated in the statement and production of proof of withdrawal of appeal, wherever applicable, the Designated Committee shall issue a discharge certificate in electronic form, within 30 days of the said payment and production of proof, whichever is later.

31.        Whether a calculation error in statement may be rectified or not? 

Yes, within 30 days of the date of issue of a statement indicating the amount payable by the declarant, the Designated Committee may modify its order only to correct an arithmetical error or clerical error, which is apparent on the face of record, on such error being pointed out by the declarant or suo-motu.

32. What will be the benefits of discharge certificate issued under the Scheme? 

Every discharge certificate issued under section 127 with respect to the amount payable under the Scheme shall be conclusive as to the matter and time period stated therein, and: 

(a)            the declarant shall not be liable to pay any further duty/tax, interest, or penalty with respect to the matter and time period covered in the declaration; 

(b)            the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration; and 

(c)             no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment.

33. Can I take input tax credit for any amount paid under the Scheme?

No.

34. Can I pay any amount under the Scheme through the input tax credit account under the indirect tax enactment or any other Act? 

  No.

35. Can I take a refund of an amount deposited under the Scheme? 

  No.

36. In cases where pre-deposit or other deposit already paid exceeds the amount payable as indicated in the statement of the designated committee, the difference shall be refunded or not? 

 No, it shall not be refunded.

37. Is there any benefit, concession or immunity for the declarant in any proceedings other than those in relation to the matter and time period to which the declaration has been made? 

  No.

38. Whether the discharge certificate under the Scheme would serve as immunity against issuance of any further SCN (i) for the same matter for a subsequent time period; or (ii) for a different matter for the same time period? 

No, as per section 129 (2)(b), the issue of the discharge certificate with respect to a matter for a time period shall not preclude the issue of a SCN, (i) for the same matter for a subsequent time period; or (ii) for a different matter for the same time period.

39. What action would be taken against a declarant who makes false voluntary disclosure under the Scheme? 

As per section 129(2)(c), in cases of voluntary disclosure, where any material particular furnished in the declaration is subsequently found to be false, within a period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted. 

40. Does intimation for audit received by the taxpayer prior to 30.06.2019 seeking details qualify for the Scheme? 

 No, if the duty/tax payable has not been quantified as on 30.06.2019 the taxpayer is not eligible to make a declaration regarding this audit under the Scheme.

41. I have received an intimation for audit, enquiry or investigation on or before 30.06.2019. Can I make a voluntary disclosure of my liability? 

  No.

42. Can taxpayer opt for the benefit under the Scheme in case of periodical notices without opting for it in respect of the main notice? 

  Yes.

43. If the main noticee avails benefit of the Scheme whether Directors whose appeals are pending in respect of penalty only get a waiver of the penalty? 

Yes. Co-noticees cannot avail the benefits of the Scheme only till such time that the duty/tax demand has not been settled. Once the main noticee discharges the duty/tax demand, the co-noticees can apply under the Scheme.

44. If a person has been issued a SCN for a refund/ erroneous refund and, at the same time, he also has other outstanding disputes which are covered under this Scheme, then, will he be eligible to file a declaration(s) for the other case(s)? 

  Yes. The exception from eligibility is for ‘the case’ and not ‘the person’.

45. If I file a declaration under the Scheme, will it be assumed that I have admitted to the position and agree with the allegations made in the show cause notice? 

No. A declaration under the Scheme will not be a basis for assuming that the declarant has admitted the position and no fresh show cause notice will be issued merely on that basis.

46. With respect to penalty/late fee matters, whether only SCNs for late fee or penalty are covered under this Scheme or also such cases under appellate proceedings? 

The Scheme is applicable to any SCN for penalty/late fee, irrespective of whether it is under adjudication or appeal.

47. I had made an application to the Settlement Commission for settlement of my case. However these proceedings abated due to rejection of the application by the Settlement Commission or other reason/s and the case went back to the adjudicating authority for further action. Can I avail the benefit of the Scheme with respect to this case? 

Yes. A declaration under the Scheme can be made for a case which is no longer with the Settlement Commission if other conditions of the Scheme are satisfied.

48. I have filed a writ petition challenging the order of the Settlement Commission. Can I make a declaration under the Scheme with respect to this case? 

Yes. A declaration can be filed under the Scheme if no application is pending before the Settlement Commission and the Writ Petition has not been heard finally on or before 30.06.2019.

49. With respect to cases under enquiry, investigation or audit what is meant by ‘written communication’ quantifying demand? 

Written communication will include a letter intimating duty/tax demand or duty/tax liability admitted by the person during enquiry, investigation or audit or audit report etc.

50. I have already paid duty/tax by utilising the input credit, and the matter is under dispute. Will this duty/tax already paid through input credit be adjusted against my duty/tax liability calculated under the Scheme? 

Yes. In such cases, duty/tax already paid through input credit shall be adjusted by the Designated Committee at the time of determination of final amount payable under the Scheme.

51. Which is the Form through which I can make a declaration under the Scheme? 

Form SVLDRS1 is the form that has to be filled for making a declaration.The form is required to be filled and submitted electronically and shall be available at the portal https://cbic-gst.gov.in

52. I do not agree with the estimate of the Designated Committee. Will I be given a personal hearing? 

Yes. A date of personal hearing is intimated alongwith the estimate issued by the Designated Committee in Form SVLDRS2. Written submissions can be made, personal hearing can be waived, and one adjournment of the personal hearing can also be sought through Form SVLDRS 2A. These forms are available at the portal https://cbic-gst.gov.in and are submitted electronically.

53. I have received a communication of the amount payable in Form SVLDRS3. How do I make the duty/tax payment? 

A challan can be generated by a link provided in the Form SVLDRS3 issued by the department. Once the challan is generated, payment against the same can be made by the taxpayer.

54. How do I intimate the department about withdrawal of appeal by me? 

Form SVLDRS3 provides a document upload facility for furnishing proof of withdrawal.

55. Are disputes pertaining to Cenvat credit covered under the Scheme?

Yes, they are included unless covered by a specific exclusion.

56. What happens if I do not make the payment of the amount specified in the statement within 30 days of its issue? 

The declaration shall be treated as lapsed and benefits of the Scheme will no longer be available.

57. The amount quantified under an enquiry, investigation or audit on or before 30.06.2019 gets modified subsequently due to any reason. Will I still be eligible to file a declaration under the Scheme? 

Only such cases of enquiry, investigation or audit are covered under the Scheme where the duty/tax demand has been worked out on or before 30.06.2019 but SCN has not been issued.

58. The duty demand in an SCN issued to me was dropped by the adjudicating authority. However, the department has filed an appeal. I have not filed any appeal in the matter. Will this case by eligible under the Scheme. 

  Yes. 

Notes:

1. For Scheme details please refer to the Finance (No.2) Act, 2019. 

2. The ‘sections’ referred above are those of the Finance (No.2) Act,2019.

3. In case of any apparent inconsistency between the contents of these FAQs    and the statutory provisions, the latter shall prevail.]