The legacy dispute resolution scheme for indirect tax taxpayers has seen a tepid response at the half-way point with only a fraction of the amount locked in litigation coming forward. Sources said the lack of takers in the first two months (September and October) could be due to the preoccupation of businesses with GST and income tax audits.
The sources said that Rs. 5,472 crore (inclusive of the pre-deposit amount of Rs. 4,225 crores) had been declared under the scheme, so far. This contrasts with nearly Rs. 3.6 lakh crore stuck in legal battles pertaining to various quasi-judicial, appellate and judicial forums under service tax and central excise put together. This has prompted the Central Board of Indirect Taxes and Customs (CBIC) to ask its zonal heads to proactively reach out to 1.8 lakh taxpayers. The Board has also told its officials that their performance would be adjudged on persuading taxpayers to avail of the scheme.
The experts and businesses have hailed the scheme as it provides relief to the tune of 70% of the duty involved if it is Rs. 50 lakh or less, and 50% if it is more than Rs. 50 lakh. This is for cases pending in adjudication or appeal or in investigation and audit. Further, in cases of outstanding arrears of revenue, the relief is 60% of the duty amount if it is Rs. 50 lakh or less, and 40% if it is more than Rs. 50 lakh. In all cases, there is a full waiver of interest and penalty, and exemption from prosecution. There are, however, some exclusions such as if the person is convicted in the same case.
The scheme’s ambit includes cases under investigation, adjudication as well as arrears of confirmed demand. “These cases invariably drag on for years, burdening the taxpayers, especially those in the MSME sector. The introduction of GST, which has subsumed these legacy taxes, has given an opportunity to the government and taxpayers to settle these cases,” a source said.