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India Seeking To Bury Legacy Indirect Tax Disputes This Year

by Mary Swire,, Hong Kong

30 August 2019

India will launch its legacy dispute scheme starting September 1, 2019.

Announced in the 2019-20 Budget, the initiative is intended to speed up the resolution of legacy service tax and excise duty-related disputes, following the tax's replacement with goods and services tax. It will be on offer until the end of this year.

The Government said the two main components of the scheme are dispute resolution and amnesty. It said: "The dispute resolution component is aimed at liquidating the legacy cases of central excise and service tax that are subsumed in GST and are pending in litigation at various forums. The amnesty component of the scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any other consequence under the law."

"The most attractive aspect of the scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fines, and penalties. [...] There is also a complete amnesty from prosecution."

"For all the cases pending in adjudication or appeal – in any forum - this scheme offers a relief of 70 percent from the duty demand if it is INR5m (USD13,900) or less and 50 percent if it is more than INR5m. The same relief is available for cases under investigation and audit where the duty involved is quantified and communicated to the party or admitted by him in a statement on or before June 30, 2019."

"Further, in cases of confirmed duty demand, where there is no appeal pending, the relief offered is 60 percent of the confirmed duty amount if the same is INR5m or less and it is 40 percent if the confirmed duty amount is more than INR5m. Finally, in cases of voluntary disclosure, the person availing the scheme will have to pay only the full amount of disclosed duty."

TAGS: Finance | tax | business | India | interest | law | goods and services tax (GST) | audit | excise duty | legislation | penalties | services | Other | Tax

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