By CA Varun Vijaywargi:
In Indian, pendency of litigation before various forums has been on a constant rise and number of cases under indirect taxes is not an exception to this scenario. In the recent past, Government has taken a few steps to reduce litigation by raising monetary limits for filing appeals before appellate forum and also instructed tax authorities to withdraw appeals where the amounts in dispute are below the threshold limits (except for matters involving substantial question of law). In spite of such measures, there was a grave demand for introducing a scheme which can make it attractive to the taxpayer to close litigations.
Finally, the Union Budget 2019 has proposed an Amnesty Scheme--Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019) that aims for quick resolution of pre-GST litigation under various Acts, including, Service Tax and Central Excise. Even, the Finance Minister Nirmala Sitharaman in her Budget speech stated that this is an opportunity for trade and business to be free from legacy litigations. The Scheme proposes to offer significant relief to the tune of 40% to 70% waiver in case of tax amount and full waiver in case of interest and penalty. In cases, where pre-deposit has been paid at any stage of litigation, then, such amount shall be appropriated against the “tax dues” that would be required to be paid under the Amnesty Scheme. As regards eligibility to claim benefit, every person is entitled to avail the benefit under the Amnesty Scheme barring a few exceptions.
The disputes which cannot be resolved by way of the Amnesty Scheme include matters which have been finally heard on or before June 30, 2019 or where before such date the disputed amount has not been quantified under any enquiry/investigation/audit. Further, any person who has been convicted for any punishable offence or any person to whom notice has been issued for a refund or erroneous refund or any person who has filed a case for settlement before the settlement commission, shall also be excluded from availing the benefit under the Amnesty Scheme.
The declaration seeking relief under the Amnesty Scheme has to be made electronically. A Designated Committee shall be formed to examine such declaration for the purpose of finalising the amounts payable as “tax dues”. If the calculation of amount payable as “tax dues” by the Designated Committee’s exceeds the amount declared, then, the declarant would be given an opportunity of being heard before the amount payable is finalised.
Upon finalisation of the “tax dues”, the Designated Committee shall issue a statement in this regard. While the overall Scheme of indirect taxation has been simplified with the introduction of GST, there are several issues on legal/interpretation side which the taxpayers are still grappling with. The issues faced under GST comprise of transitional credits – eligibility/time limit, multiple rates, classification disputes, nature of supply – whether composite or mixed, valuation issues in related-party transactions, complex input credit scenario, to name a few. Authorities are already issuing notices in GST matters which indicate that the volume of litigation under GST law will not be any different. Considering this, there was an urgent need to take measures to reduce litigation under erstwhile laws so that the judicial time is vacated for accommodating litigation under GST. In the process the proposed Amnesty Scheme can be a boon to many. (The author is practising chartered accountant and may be reach at [email protected])