The Central Board of Indirect Taxes and Customs (CBIC) has decided to go after tax evaders, who had made declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme of 2019, but failed to pay the relevant tax subsequently. The drive aims to recover over Rs 50,000 crore lying with the taxpayers.
Following a report by the Comptroller and Auditor General of India (CAG), the board has directed its field formations to “vigorously” pursue these cases so as to “protect the interest of revenue”.
“In view of the observations made by the Audit, it is again directed that appropriate action may be taken in all the cases where the declarant has filed declaration under ‘voluntary disclosure’ category but did not make the payment under the scheme,” it said in a recent letter.
The move comes at a time when the CBIC is hoping to improve compliance and widen the tax net to boost revenue collection.
About 0.19 million declarations were made under the Sabka Vishwas scheme. The total tax dues revealed under these declarations were at Rs 90,000 crore. However, the scheme is understood to have resulted in recovery of only about `39,500 crore.
The audit had also highlighted that some tax evaders who had opted for the Voluntary Compliance Encouragement Scheme, 2013, were not retained in the tax net. These evaders had once again filed declarations under the voluntary disclosure category of the Sabka Vishwas scheme, the CBIC said.
It also cited a previous directive of the board, which had noted that those who had paid the tax under the previous two amnesty schemes “should be monitored regularly and should be kept in the tax net”. “The jurisdictional authorities may ensure that regular returns are being filed under GST by the assessees (if registered), specifically in the cases pointed out by audit in this regard,” the letter said.
While 0.13 million cases were settled under the Sabka Vishwas scheme, another 28,825 cases were not completed due to non-fulfilment of obligation by the taxpayer. As many as 29,167 declarations were rejected.
“The Department may take effective steps to pursue, in a time-bound manner those cases which were rejected under the ‘Scheme’ as well as the 28,825 cases for which discharge certificates, could not be issued, especially due to non-payment of the estimated payable amount. In particular, ‘Voluntary Disclosure’ cases where liability was not discharged should be vigorously pursued to protect the interest of the revenue,” the report had said. It had stressed that arrears are confirmed demand and have no expiry date and it is possible that many of the declarants might have migrated to the GST regime as assessees, and therefore recovery actions are pursuable.
The Sabka Vishwas scheme, which was a part of the Finance Act, 2019, was an amnesty-cum-dispute settlement scheme aimed at pre-GST taxpayers of central excise duty and service tax. It provided a one-time opportunity to the taxpayer to settle the tax dispute and avail tax relief. The relief varied from 40-70% of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved and also provided relief from payment of interest and penalty. For voluntary disclosures, the relief was regarding waiver of interest and penalty on payment of full tax dues disclosed. Further, the person discharged under the scheme was not liable for prosecution.
Other recommendations of the CAG report included removing the cases settled under the scheme from the pendency list of legal forums and rectifying error in cases where discharge certificate has not been issued due to technical reasons, despite the applicant having fulfilled all requisites and made payments in time. The CBIC has also asked field officials to work on these issues.