CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS · This Scheme shall be called the Sabka Vishwas...

GST- Meeting

www.cbec.gov.in https://cbic-gst.gov.inCENTRAL BOARD OF INDIRECT TAXES & CUSTOMS

R. SRIVATSANAdditional Assistant Director & Sr. Faculty

NATIONAL ACADEMY OF CUSTOMS INDIRECT TAXES & NARCOTICSCHENNAI

04.10.2019

➢ A Pragmatic & Bold endeavour to resolve Central Ex., S.Tax and26 Cesses and allow business to make a new beginning.

➢ To off load 3.75 Lakh Crore locked up in litigations and has twocomponents (a) Dispute Resolutions and (b) Amnesty

➢ VIDS (1997)/ KVSS (1998)/ VCES (2013) /DTDS (2016) werealready floated by the Union Government earlier which were asuccess.

➢ Similar Schemes were offered by some states earlier also

➢ No Talk on Morality on Amnesty schemes as it is a Macro steptaken even if 40-50 Thousand Crores are collected, it willresolve the liquidity crisis at present. All negatives should takea back seat now.

PREAMBLE

➢ Success rate of Government Appeals are around 15-20% andtherefore this should reduce the dispute loads and should bepatronized. Appeals filed mechanically. Such issues will beresolved now.

➢ Transparency – No scope of interpretation by the Authorities –Clear reliefs – Standardized forms and procedures – should beeasy to avail the benefits extended by the scheme.

➢ Department has also doubled the Monetary limits of appealsand that will also automatically reduce litigations

➢ Interest of the Tax dues is compromised but the interest of theEconomy is ensured;

PREAMBLE

➢ This Scheme shall be called the Sabka Vishwas (LegacyDispute Resolution) Scheme, 2019.

➢ Scheme is Open from 01.09.2019 to 31.12.2019 (Notfn.

No:04/2019-CE (NT)

➢ The Scheme is applicable to the Central Excise Act, 1944or the Central Excise Tariff Act, 1985 or Chapter V ofthe Finance Act, 1994 and 26 other Acts and the Rulesmade thereunder.

➢ Pending Arrears and litigated disputes etc., before30-06-2019 are covered.

INTRODUCTION TO THE SCHEME

➢ Legislated through - Chapter V Section 120 to 135 of theFinance (No. 2) Act, 2019;.

➢ Procedures through SVLDRS Rules 2019 –Rule 1 to 9issued vide Notification No: 05/2019-CE, dt:21-08-2019.

➢ Standardized Forms SVLDRS Form 1, 2,2A, 2B,3 and 4also notified.

➢ Application only through at https://cbic-gst.gov.in withauto Acknowledgement bearing URN.

➢ The Application form has been designed with a set of10 questions to decide the eligibility about thescheme.

AUTHORITY

OBJECTIVES OF THE SCHEME

The Scheme provides that eligible persons

shall declare the unpaid tax dues and pay

the same in accordance with the provisions

of the Scheme.

The Scheme provides for certain immunities including

penalty, interest or any other proceedings & including

prosecution to those persons who pay the declared

tax dues.

1

2

3

The Scheme is a one time measure for

liquidation of past disputes of Central

Excise, Service Tax and 26 other indirect

tax enactments.

➢ An enquiry, investigation or audit where the amountis quantified / Communicated / Accepted on orbefore the 30th day of June, 2019

➢ A show cause notice or appeals arising out of aOrder pending as on the 30th day of June, 2019

➢ An amount in arrears

➢ A voluntary disclosure

Cases covered under the Scheme…

Including Cases under Call Book

Arrears arising out of SingleAppeal

(Dept. or Party appeal)

Enquiry or

Investigation

or Audit (quantified as on

30th June 2019)

SCN

issued(as on 30th June

2019)

An

amount in

Arrears

Arrears arising out of more than one appeal (Dept. and

Party appeal)

Voluntary

Disclosure

“Quantified” means a written communication of the amount of duty payable under the indirect tax enactment.

“Audit” means Scrutiny and

verification by CE Officer when a

written communication is sent

‘‘Enquiry or investigation’’, under any of the indirect tax enactment, shall include the following actions, namely:—

(i)search of premises;(ii)issuance of summons;(iii)Letters asking for production of accounts, documentsor other evidence;(iv)recording of statements.

TAX DUES

Q. Sl.No: 8

of Form

SVLDRS-1

EXAMPLES FOR TAX DUES

SCN FOR DUTY `1000 AND PENALTY `100

ORDER IS FOR `1000

AND PENALTY IS `100

SCN FOR DUTY `1000

AND PENALTY `100

ORDER IS FOR `900

AND PENALTY IS `90

SCN FOR DUTY `1000 AND

PENALTY `100

ORDER IS FOR `900 AND

PENALTY IS `90

ASSESSEE FILES APPEAL

AGAINST ORDER AND

DEPT FILES APPEAL FOR `100

PLUS PENALTY `10

SCN FOR DUTY

`1000 AND PENALTY

`100 & CONFIRMED.FIRST APPEAL

REDUCES DUTY TO

`900. FILES SECOND

APPEAL

TAX DUES

ARE `1000

TAX DUES

ARE `900

TAX DUES

ARE `1000

(900 + 100)

TAX DUES

ARE `900

“Amount payable” means the final amount payable by the declarant as

determined by the designated committee and as indicated in the statement

issued by it SVLDRS-3 and shall be calculated as the amount of tax dues less the

tax relief.

RELIEF AVAILABLE

SL.

NO:LEVEL OF PENDENCY

DUTY / TAX / CESS

AMOUNT INVOLVED

RELIEF IN

TAX/DUTY/ CESS

LIABILITY GRANTED

TAX/DUTY/CESS

PAYABLE

FINALLY

2.

The Show Cause Notice is only for

Penalty / Late Fee and the Tax is

either paid or NIL. Penalty is

imposed for Partners etc.,

Penalty / Fine /Late

Fee

Entire

Penalty

or Late

Fee

NIL

1.

Amount Pending as Dispute on

Account of Show Cause Notice /

Appellate Authority as on 30th

June 2019

up to50 Lakhs 70% 30%

>50 Lakhs 50% 50%

PENALTY / INTEREST AND PROSECUTION ARE WAIVED COMPLETELY

RELIEF AVAILABLE

SL.

NO:LEVEL OF PENDENCY

DUTY / TAX / CESS

AMOUNT INVOLVED

RELIEF IN

TAX/DUTY/ CESS

LIABILITY GRANTED

TAX/DUTY/CESS

PAYABLE

FINALLY

4.

Amount were assessed and

declared as self-admitted

liabilities but not paid.

up to50 Lakhs 60% 40%

>50 Lakhs 40% 60%

3.

Amount on account of

Arrears (where no further

appeals filed) or all appeals

lost.

up to50 Lakhs 60% 40%

>50 Lakhs 40% 60%

PENALTY / INTEREST AND PROSECUTION ARE WAIVED

RELIEF AVAILABLE

SL.

NO:LEVEL OF PENDENCY

DUTY / TAX / CESS

AMOUNT INVOLVED

RELIEF IN

TAX/DUTY/ CESS

LIABILITY GRANTED

TAX/DUTY/CESS

PAYABLE

FINALLY

5.

Amount Quantified &

Communicated in any Audit,

Enquiry, Investigation etc.,

uptoRs. 50 Lakhs 70% 30%

AboveRs. 50 Lakhs 50% 50%

PENALTY / INTEREST AND PROSECUTION ARE WAIVED

6. Voluntary DisclosureNo

ThresholdNIL 100%

Voluntarydisclosure under this

scheme

Not eligible for any tax relief,but relief available

for interest, Fines and penalty

No verification by designated committee

Within one year, if found to be false, appropriate proceedings shall be

initiated

CANNOT (VOLUNTARILY) MAKE A DISCLOSURE AFTER AN ENQUIRY OR INVESTIGATION OR AUDIT OR FOR AN AMOUNT DECLARED AS PAYABLE IN A RETURN FILED CONSEQUENT

TO SUCH PROCEEDINGS

VD - RELIEF AVAILABLE

14

PRECONDITIONS & RESTRICTIONS

PRECONDITIONS

➢ The relief calculated shall be

subject to the condition that any

amount paid as pre-deposit

shall be deducted when issuing

the statement indicating the

amount payable by the declarant.

➢ Provided that if the amount of

pre- deposit or deposit already

paid > the amount payable the

declarant shall not be entitled

to any refund.

RESTRICTIONS

(a)Shall not be paid through the

input tax credit account.

(b)Shall not be taken as input

tax credit; or entitle any

person to take input tax credit,

as a recipient, of the excisable

goods or taxable services.

(c)Shall not be refundable

under any circumstances.

A Declaration in

Electronic form

SVLDRS-1

A designated

committee shall

verify correctness

When amount declared =

Estimated Amount,a

statement in electronic form

shall be issued within 60 days

SVLDRS-3

When Estimated Amount >

Amount declared by

declarant, an estimate of payment

shall be issued within 30 days

SVLDRS-2 (PH)

One Personal Hearing will

be given, before issuing

statement of amount

payable

After hearing the declarant,

an e-statement indicating

amount payable shall be

issued within 60 days

The declarant shall

pay online within

30 days

On payment and production

of proof of withdrawal of

appeal, the committee shall

issue Discharge Certificate

within 30 days

Within 30 days of issuance of

Discharge Certificate, the

committee can modify its order

only to correct an arithmetical

error or clerical error

VERIFICATION OF DECLARATION

A TYPICAL FLOW CHART OF SEQUENCE OF PROCESSES

SVLDRS-2A

SVLDRS-3

SVLDRS-4

Step-1 Step-2

Step-3

Step-4Step-5

Step-2A

Step-2BStep-2C

Step-2D

a

b

d

e

f

g

h

Appeal before appellate forum and

heard finally on or before 30th

June 2019

Convicted for any offence for the

matter for which he intends to file a

declaration

Issued a SCN and final hearing

has taken place on or before

30th June 2019

a

b

c

Issued a SCN for erroneous

refund or refundd

Subjected to enquiry or

investigation or audit and

duty involved has not

been quantified on

or before 30th June 2019

e

Voluntary Disclosure after

being subjected to any

enquiry or investigation or

audit & filed a return,

indicating duty as payable, but

has not paid it

f

Excisable goods from Fourth Schedule to the Central Excise Act, 1944

Application in the

Settlement Commission

h

g

(8) Not eligible to make a declaration under the

scheme

C

Wrap up - Other features of the Scheme…

❖ Facility for adjustment of any deposits of duty already made

❖ Settlement dues to be paid in cash electronically only and cannotbe availed as input tax credit later

❖ A full and final closure of the proceedings in question. The onlyexception is that in case of voluntary disclosure of liability, thereis provision to reopen a false declaration within a period of oneyear.

❖ Proceedings under the Scheme shall not treated as a precedentfor past and future liabilities

❖ Final decision to be communicated within 60 days of application

❖ No final decision without an opportunity for personal hearing incase of any disagreement

❖ Proceedings under the Scheme will be fully automated

AFT

ERIS

SUA

NC

E O

F D

ISC

HA

RG

E C

ERTI

FIC

ATE

a) Not be liable to pay any further duty, interest, or penalty with respect to the matter and the time periodcovered.

b) Not be liable to be prosecuted under the Indirect

Tax enactment.

c) Shall not be reopened in any other proceedingunder the Indirect Tax enactment.

d) If false declaration is made in voluntary disclosure,proceedings under the applicable laws shall be started withina time-limit of one year.

Finally……………

➢ The taxpayer can apply for this scheme from https://cbic-gst.gov.in

➢ The taxpayer already registered under CE / ST can login andfill Part-B of SVLDRS Form-1.

➢ The unregistered taxpayer can register himself by fillingPart-A of SVLDRS Form -1.

How to Apply for SVLDRS, 2019…

➢ Enquiry Started – Amount not Quantified by 30-06-2019.

➢ Multiple Issues in a SCN – Selective option for one issue;

➢ Enquiry Started – Voluntary Disclosure is not allowed

➢ Contradiction between 124(1) (c)(iii) arrears category and 125(1)(f)(i) is a exception from VD for a defaulter.

➢ Co-Noticee – Can independently apply only on payment / settlement ofall dues of original notice otherwise he cannot apply.

➢ Periodical Notices – also eligible if it had been issued < 30-06-2019and no final hearing has taken place.

➢ Pre-deposit or any amount paid during investigation or Audit shall beadjusted (including those paid through CENVAT Credit) whileindicating the Estimated Amount payable from the Tax dues.

Some Issues – ClarifiedCircular No: 1071/04/2018-CX-8, dt:27-08-2019

➢ No refunds of Excess amounts.

➢ Immunity is only for the issue applied for and not across the board;

➢ False Voluntary Declaration – Undoes the amnesty and normalproceedings will resume as if the earlier proceedings were nevermade;

➢ Filing of Application is not admission of accusations in the SCN, it ismere expression of intend to resolve the disputes;

➢ Issue Filed with Settlement Commission – But the Commissionrejected the application or remanded back to the Original Authority– Declaration under the scheme can be made.

➢ A link is provided under SVLDRS form – 3 for Estimated amountpayment. Once challan is generated, payment can be madeelectronically.

Some Issues – Clarified

Circular No: 1071/04/2018-CX-8, dt:27-08-2019

➢ Eligibility is decided on Self Declaration – Wrong Declaration thesystem will allow (Sl.no:8) but if it is found later, it becomes voidand will be informed through a letter.

➢ Once SVLDRS is opted, it is deemed withdrawal of appeals;.Included Departmental appeal; except SC/HC. Dept. will withdrawimmediately after Discharge Certificate.

➢ Self assessed Tax admitted but not paid in return – each default isa separate case / Amount in Arrears – and separate Applicationneed to be filed;

➢ Cases where Notice is issued for appropriating duty already paidbut only for interest can also come into the scheme.

Some Issues – Clarified

Circular No: 1071/05/2018-CX-8, dt:27-09-2019

Some Issues – Clarified

Circular No: 1071/05/2018-CX-8, dt:27-09-2019

SCN FOR DUTY 1 Crore

Amount paid already: 60 Lakhs

Amount

Payable 40%

on 40 Lakhs

= 16 Lakhs

No appeal filed

Amount in Arrears: 40 Lakhs

Tax Dues: 40 Lakhs (< Rs.50 Lakhs)

Tax Relief: 60 %

SCN FOR DUTY 1 CroreConfirmed : 60 Lakhs

Amount Payable

50% on 1 Crore

= 50 Lakhs

Appeal filed by party for 60L and

Dept for 40LAmount in Litigation: 60+40 Lakhs

Tax Dues: 1 Crore (> Rs.50 Lakhs)

Tax Relief: 50 %

Dropped : 40 Lakhs

The Dte. Of Taxpayer

Services –CBIC have

come out with set of

FAQs on the subject

matter consisting of 43

questions which may be

referred for any further

apprehensions.

FAQs on the Scheme

If the tax/duty was paid during the investigation underprotest and

➢ this amount is in excess of the actual liability ormore than the prescribed amount to be paid underthe Scheme,

➢ such excess amount paid shall not be refundedunder the scheme.

In the cases of payment is made under protest, thisamnesty scheme may not be of any use.

Some Issues

Payment under Protest

Where the amount to be declared is based on the amount demanded inthe show cause notice, there could be many

➢ errors in the computation of demand such as arithmeticalerror, clerical error,

➢ wrong rate of tax/duty,

➢ exemptions not considered or

➢ part demand may fall beyond limitation period etc

Such errors could be there in case of appeals also.

Wrong invocation of Extended Period also?

Such cases may not come – Designated Committee cannot take a call onthat.

Some Issues –

Computation of benefit

If the Estimated amount indicated in thestatement issued by the designated committee isnot acceptable to the declarant,

➢ The declarant can walk off at any time.

Some Issues –

Withdraw The Declaration

Taxpayer select the scheme

The answer to first four question should be “No” in

order to apply for this scheme.

Different categories available under this

scheme. The taxpayer will select category ,

subcategory and duty type.

Form SVLDRS-1

Form SVLDRS-1

Form SVLDRS-1

Form SVLDRS-1

Form SVLDRS-1

Form SVLDRS-1

If the taxpayer doesn’t agree with the

Computer Generated amount then the taxpayer

can enter amount as per his calculation.

By clicking the submit button, Form SVLDRS-1 will be submitted to concerned Committee. ARN will generated & the taxpayer will be informed via email and SMS.

Form SVLDRS-1

Form SVLDRS-1

Form SVLDRS View

The tax officer will be shown options

to issue SVLDRS 2 & SVLDRS 3.

Form SVLDRS-2

If the taxpayer doesn’t agree with SVLDRS-2

and in case want adjournment. Form 2A

Form 2B

Adjournment of PH by the tax officer.

Form 2B

Adjournment of PH by the tax officer.

Form 3

Estimated Amount

Form 3

Estimated Amount

Challan generation and gateway to

make payment window.

SVLDRS-4 issued by the officer

after payment

Helpline No…

CBIC Mitra Helpdesk

Toll Free No. 1800-1200-232

Cbecmitra.helpdesk@icegate.gov.in

Cbec-gst.gov.in>HELP>SELF SERVICE

Epilogue

Questions

52

G. S. Bhullar & Co.Chartered Accountants