Objective:
- The scheme is bought about for the resolution of legacy disputes related to Central Excise, Service Tax and Cesses, which were all absorbed by the Goods and Services Tax (GST) in 2017.Â
- It is one time measure for liquidation of past disputes of Central Excise and Service Tax.
- To provide an opportunity of voluntary disclosure to non-compliant taxpayers.
Eligibility Criteria – Cases covered under the scheme
- A show cause notice or appeal arising out of a show cause notice pending as on 30th day of June, 2019.
- An enquiry, investigation or audit where the amount is quantified on or before the 30th day of June, 2019
- An amount in arrears
- A voluntary Disclosure
Exclusions from the scheme
- Cases in respect of excisable goods set forth in the Fourth Schedule of the Central Excise Act, 1944 (this includes tobacco and specified petroleum products)
- Cases for which the taxpayer has been convicted under the Central Excise Act, 194 or the Finance Act, 1944
- Cases involving erroneous refunds
- Cases pending before the settlement Commission.
Relief/Benefit under the scheme
- The Scheme provides for waiver of interest and penalty as well as of fine.
- Declarant will not be liable to any prosecution.
- Relief range anywhere from 40% to 70%.
The relief offered under the Scheme shall be computed based on the amount of tax dues determined.Â
| Stage of Dispute | Tax Dues/Amount for Resolution |
| Appeal(s) arising out of an order (out of adjudication and appellate proceedings) | Total tax being disputed in all appeal(s) put together (whether by the taxpayer or the Revenue) against a given order. |
| SCN received | Tax stated to be payable as per the notice. |
| Enquiry/Investigation/Audit | Tax quantified in such enquiry/investigation/audit. |
| Arrears, defined as liabilities admitted in return but unpaid or confirmed in an appellate proceeding, which cannot be appealed against due to time limitation. | Tax in arrears |
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Determination of Tax Relief
| Where Tax Dues Relatable to | Amount of Tax Dues | Tax Relief |
| An SCN or one/more appeals arising out of such notice | More than INR 50 lakh | 50% of the Tax Dues |
| INR 50 lakh or less | 70% of the Tax Dues | |
| SCN for a late fee or penalty only with underlying tax/duty demand either being fully paid already or being NIL | Any | Entire amount of late fee and/or penalty, as the case may be |
| Arrears (as reported in the return) | More than INR 50 lakh | 40% of the Tax Dues |
| INR 50 lakh or less | 60% of the Tax Dues | |
| Arrears – others | More than INR 50 lakh | 40% of the Tax Dues |
| INR 50 lakh or less | 60% of the Tax Dues | |
| Enquiry or Investigation or Audit | More than INR 50 lakh | 50% of the Tax Dues |
| INR 50 lakh or less | 70% of the Tax Dues |
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Other features of the Scheme:
- Facility of adjustment of any deposits of duty already made.
- Settlement dues to be paid in cash electronically and cannot be availed as input tax credit later.
- A full and final closure of the proceedings in question. The only exception is that in case of voluntary disclosure of the liability, there is a provision to reopen a false declaration within a period of one year.
- Final decision to be communicated within 60 days of application.
