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THE INSIGHT

SVLDRS, 2019 needs to be extended further
By S Ramani
Jan 13, 2020

SABKA Vishwas Scheme is introduced to close issues pending under the erstwhile Central Excise Act 1944 and Chapter V of Finance Act 1994 among others with payment of partial Duty/Tax liability with waiver of interest/ penalty and immunity from prosecution.

The Scheme is available to Legacy issues where SCNs issued as of 30.6.2019 or duty liability has been quantified by Audit on or before 30.6.2019 and such other cases covered therein.

When the Scheme is meant to address Legacy issues especially the cases arising out of Audit, the limitation as to Duty/Tax being quantified on or before 30.6.2019 is highly discriminatory.

The reason being there are cases Legacy Audit process had been taken up by the Dept. well ahead of June 2019 (even as of 2017-18) and finalization of audit and quantification of Duty/Tax are delayed for no fault of Assessees. In these cases, assesses who are served with letter quantifying the duty/ Demand of Duty/Tax arising out of Audit after 30.6.2019 are deprived of the benefits given under this scheme.

When the purpose of the scheme is to close all Legacy issues there should not be differential treatment and the scheme should have been drafted in such a way the same effectively addresses all Legacy issues without discrimination.

Scheme should have been thrown open upto March 2020 giving option to file declaration arising out of all Legacy matters before the said date without confining the date of occurrence of SCN or Demand as "on or before 30.6.2019."

Also CBIC should have issued mandate to all field officials to complete Legacy audit before 31.3.2020 and the SVLDRS scheme should have been offered to all assesses who have been served with Duty demand as of 31.3.2020. If not, the Scheme would be deemed to be discriminatory and fit to be challenged.

[The author is General Manager (Legal & Indirect Taxation), Simpson and Company Ltd., Chennai and the views expressed are strictly personal.]