How legacy dispute resolution scheme will help taxpayers

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Published: July 13, 2019 12:41:55 AM

CBIC member Sandeep Bhatnagar says the scheme provides taxpayers with relief of 60-70% of the amount under contention in certain cases

The dispute resolution-cum-amnesty scheme is aimed at resolving Rs 3.8 lakh crore worth of revenue stuck in litigation pertaining to excise and service tax regime. (Representational image)The dispute resolution-cum-amnesty scheme is aimed at resolving Rs 3.8 lakh crore worth of revenue stuck in litigation pertaining to excise and service tax regime. (Representational image)

The legacy dispute resolution scheme announced in the Budget provides taxpayers with relief of 60-70% of the amount under contention in certain cases and will pave the way for taxpayers’ smooth transition to the goods and services tax (GST) regime, member of the indirect tax board (CBIC) Sandeep Bhatnagar said on Wednesday.

The dispute resolution-cum-amnesty scheme is aimed at resolving Rs 3.8 lakh crore worth of revenue stuck in litigation pertaining to excise and service tax regime.

Some of the cases have been stuck for as many as 10 years, Bhatnagar added. He was speaking at a post-Budget event organised by industry body Confederation of Indian Industry (CII).

“We had launched dispute resolution schemes in 1998 and 2013 also but they were not accepted widely due to inherent flaws. However, the current scheme imposes no penalty, no interest and no prosecution,” Bhatnagar said.

“This dispute resolution scheme is very different from earlier schemes such as VCES , 2013, and offers several benefits to certain businesses. However, a careful evaluation is essential before deciding to opt for the scheme or otherwise.” MS Mani, partner, Deloitte India.

According to the Finance Bill, 2019, when the tax dues have appeals arising out of show-cause notices, the taxpayer would get a relief of 70% if the demand is less than Rs 50 lakh while it would be 50% if tax demand exceeds Rs 50 lakh. Similarly, if tax dues are against late fee or penalty, and the duty amount is already paid, then the entire amount would be waived off.

Further, if the tax dues are on account of arrears, and the duty amount is less than Rs 50 lakh, the taxpayer would get 60% relief on the tax dues. For amount in excess of Rs 50 lakh, the relief would be 40%, the Finance Bill, 2019, said.

Additionally, if the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before June 30, 2019, is up to Rs 50 lakh, the waiver to taxpayer is 70% of the tax dues, and 50% for tax dues amounting to more than Rs 50 lakh.

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