Want To Settle Your Income Tax Dispute With Govt? Here's How FinMin Plans To Close Pending Litigation

With almost two years of GST roll out by the Modi government, the Income Tax (IT) department has found that tax disputes of around Rs 3.37 lakh crore is pending in service tax and excise duty litigation.

Modi government 2.0 has proposed Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. (Getty Image)

New Delhi: With almost two years of Good and Services Tax (GST) roll out by the Narendra Modi government, the Income Tax (IT) department has found that tax disputes of around Rs 3.37 lakh crore is pending in service tax and excise duty litigation. Considering this gigantic backlog of tax, the newly elected Modi government 2.0 has proposed Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 which is considered to be good move as it aims towards closure of litigation and help businesses to excel. According to a report by news agency PTI, close to 1.30 lakh legacy cases of service tax and excise duty amounting to Rs 3.75 lakh crore are locked up in litigation, wherein Rs 2.5 lakh crore is service tax and the remaining Rs 1.25 lakh crore is excise. Announced by Finance Minister Nirmala Sitharaman while tabling her maiden Union Budget in Parliament earlier this month, the scheme provides for waiver of interest and penalty in excise and service tax cases which are locked up in litigation in various forums whether adjudicating authority or High Court or Supreme Court. These businesses would also not face prosecution in case they avail the scheme. Key things to know about  Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for settling your tax disputes with the government: 1. The relief under the scheme would vary from 40 per cent to 70 per cent of the tax dues, depending on the amount involved, and the proposed dispute resolution-cum-amnesty scheme covers past cases involving taxes which have got subsumed in GST, namely Central Excise, Service Tax and cesses. 2. In is also worth noting that this amount must be paid in cash as the utilisation of input credits is not allowed under the scheme. 3. Under the scheme, taxpayers will not have to pay interest, penalty or prosecution on payment of the tax. 4. The scheme will be applicable from the date to be determined and notified by the central government. 5. The dispute and the time frame covered under Sabka Vishwas scheme will not be reopened in any other tax proceedings. Even in Budget 2013, the government had come out with Service Tax Voluntary Compliance Encouragement Scheme (VCES) to give an opportunity to service tax defaulters to pay dues and come clean. VCES was introduced as one-time amnesty scheme for paying service tax dues for the period October 1, 2007, to December 31, 2012, without interest and penalty.