About three-fourths of eligible taxpayers have settled their legacy excise and service tax disputes with the tax department after agreeing to pay Rs 30,627 crore under the Sabka Vishwas scheme till December-end. When the scheme was launched on September 1, 2019, the disputed amount under 1.83 lakh cases was as high as Rs 3.6 lakh crore.
Pertinently, the total disputed amount involved in the cases of the 1.34 lakh people who have settled the disputes was Rs 69,550 crore, just a fifth of the total amount that was locked in disputes. The amount involved in still-unresolved disputes is a staggering Rs 2.9 lakh crore. Tax experts said cash crunch with many businesses could have a role in many large disputes remaining unresolved.
Meanwhile, the Central Board of Indirect Taxes and Customs (CBIC) has extended the validity of the scheme to January 15. The Sabka Vishwas scheme was proposed in the budget with the objective of settling pending disputes of service tax and central excise. It is meant to be a one-time window for eligible persons to declare their tax dues and pay the same in accordance with the provisions.
The government said that it has noted the huge interest amongst the taxpayers for this scheme and would like to ensure that eligible taxpayers who have yet not applied to avail the relief under this scheme do not miss out due to the last-minute rush. The relief under the scheme varies from 40% to 70% of the tax dues for cases other than voluntary disclosure cases, depending on the amount of dues involved.
The scheme also provides relief from payment of interest and penalty. For voluntary disclosures, the relief is of waiver of interest and penalty on payment of full tax dues disclosed. The person discharged under the scheme shall also not be liable for prosecution.
“The extension of time for the Sabka Vishwas legacy dispute resolution scheme would also help in increasing the indirect tax collections,” said MS Mani, partner at Deloitte India.