Relief under SVLDRS, 2019: Comparative calculation of ‘amount in arrears’ vs. other categories

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The CBIC in its latest Circular No. 1072/05/2019-CX dated September 25, 2019, under Para 2(iv) has clarified that the relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (“SVLDRS, 2019”) w.r.t amount in arrears is to be computed on net outstanding amounts after deducting pre-deposits.

To explain the same, following points have been discussed:

  • Section 121(c) defines an amount in arrears as the amount of duty which is recoverable as arrears of duty. Further, Section 123 defines ‘tax dues’ in respect of arrears as the amount which is due in arrears.
  • In other words, tax dues are the amount of duty which is outstanding against the declarant. This is the net amount after deducting the dues that he has already paid. Such payment may be in the form of pre-deposits appropriated or paid subsequently by the taxpayer voluntarily against the outstanding amount.
  • It is clarified that the relief available under Section 124(1)(c) will be applied to the net outstanding amount so arrived at.
  • It may be noted that in respect of all other categories, any money paid before its appropriation is in the nature of a deposit only. Hence, in respect of declarations made under these other categories, the relief will be applied to the outstanding amount and, only thereafter the pre-deposits/deposits [Section 124(2)] shall be adjusted.

To bring out the clear picture of computation of relief under SVLDRS, 2019, we have made a comparative calculation of relief and amount payable under following numbers matrix, for easy digest:

Tax dues relatable to Amount in Arrears

Disputed Amount

(A)

Pre-deposit

(B)

Tax dues

(C)=(A-B)

 Tax Relief

(D)

Payable

(E)=(C-D)

50 Lakh 25 Lakh 25 Lakh 15 Lakh [60% of C] 10 Lakh
1 crore 50 Lakh 50 Lakh 20 Lakh [40% of C] 30 Lakh
10 Lakh 1 Lakh 9 Lakh 5.4 Lakh [60% of C] 3.6 Lakh

Other Categories viz. Tax dues related to SCN and/or Appeal or enquiry, investigation or audit pending as on 30th June 2019

Disputed Amount

(A)

Pre-deposit

(B)

Tax dues

(C)=(A)

Relief

(D)

Payable

(E)=(C-D-B)

50 Lakh 25 Lakh 50 Lakh 35 Lakh [70% of C] NIL [no refund of 10 Lakh excess paid]
1 crore 50 Lakh 1 crore 50 Lakh [50% of C] NIL
10 Lakh 1 Lakh 10 Lakh 7 Lakh [70% of C] 2 Lakh

Tax dues relatable to SCN for late fee or penalty only

Disputed Amount of penalty

(A)

Pre-deposit

(B)

Tax dues

(C)

Relief

(D) = (A)

Payable

(E)=(C-D-B)

50 Lakh NIL NIL 50 Lakh NIL
1 crore NIL NIL 1 crore NIL
10 Lakh NIL NIL 10 Lakh NIL

Tax dues on account of Voluntary Disclosure

Disputed Amount

(A)

Pre-deposit

(B)

Tax dues

(C)=(A)

Relief

(D)

Payable

(E)=(C-D-B)

50 Lakh NA 50 Lakh NIL 50 Lakh
1 crore NA 1 crore NIL 1 crore
10 Lakh NA 10 Lakh NIL 10 Lakh

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