The Central Board of Indirect Taxes and Customs (CBIC) has sought information from its field formations about assessees eligible for Sabka Vishwas — the Legacy Dispute Resolution Scheme — but have not been able to apply because of a financial crunch.

Following an announcement in the Budget in July, the LDRS scheme became operational from September 1 and will continue till December 31. The scheme aims to resolve nearly 1.5 lakh cases involving ₹3.75 lakh crore pending before Commissioner (Appeals), CESTAT, High Courts and the Supreme Court. The cases are related to Central Excise Duty, Services Tax and Central cesses which have been subsumed in the Goods & Services Tax.

The Finance Ministry, in a reply to a Lok Sabha question, this week said, a total number of 26,142 applications involving an amount of over ₹16,000 crore were received under the scheme till November 18. Of these, 2,828 applications were accepted (dispute resolved) and involved an amount of ₹162.15 crore. However, the total amount declared was much below the estimation forcing the Board to send a communication to all the field formations.

Real estate sector

According to a communication to all the Principal Chief Commissioners/Chief Commissioners of Central Tax, which has been seen by BusinessLine , it was said that realisation of tax dues under the scheme was not as per expectations. “It has been learnt from the field formations that major taxpayers, especially in the real estate sector, who are eligible to avail the scheme are not able to do so due to financial crunch,” the letter said.

The taxpayers are willing to settle the cases if banks provide them loans for the purpose, the letter said. Accordingly, all the heads have been asked to give details about taxpayers facing similar situation. The information has to be furnished by December 2. It is not clear of what use the information will be.

Scope of cases

The scheme prescribes declaration to be made in electronic mode only. It covers cases where, a showcause notice or appeals arising out of a showcause notice pending as on June 30, 2019, or an amount in arrears, or an enquiry, investigation or audit where the amount is quantified on or before the June 30, 2019 or a voluntary disclosure.

Cases related to tobacco and petroleum products will not be covered under the scheme. Also, cases for which the taxpayer has been convicted under the Central Excise Act, 1944 or the Finance Act, 1944, or cases involving erroneous refunds or cases pending before the Settlement Commission have been excluded.

The scheme prescribes total waiver of interest, penalty and fine in all cases and immunity from prosecution. In cases pending in adjudication or appeal, a relief of 70 per cent from the duty demand, if it is ₹50 lakh or less, and 50 per cent, if it is more than ₹50 lakh, has been proposed. The same relief is available for cases under investigation and audit where the duty involved is quantified on or before June 30, 2019.

In case of an amount in arrears, the relief is 60 per cent of the confirmed duty amount if the same is ₹50 lakh or less and it is 40 per cent in other cases. In cases of voluntary disclosure, the declarant will have to pay full amount of the disclosed duty. The Designated Committee will give an opportunity to the declarant of being heard, in case of a disagreement. The declarant will pay the settled amount electronically within a period of 30 days of the statement issued by the Designated Committee.

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