AMNESTY SCHEME 2019

The government has unveiled an amnesty scheme to resolve excise and service tax disputes pertaining to the period before the introduction of the goods and services tax to clear the backlog of cases and improve the ease of doing business. All parties can settle the disputes, save those who face conviction and those who have moved the Settlement Commission. Relief under the scheme varies from 40% to 70% of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved under below acts.

1. the Central Sales Tax Act, 1956;
2. the Bombay Sales of Motor Spirit Taxation Act, 1958 ;
3. the Bombay Sales Tax Act, 1959;
4.  the Maharashtra Purchase Tax on Sugarcane Act, 1962 ;
5. the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975;
6. the Maharashtra Sales Tax on the Transfer of the Right to use any Goods for any Purpose Act, 1985;
7. the Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987;
8. the Maharashtra Tax on Luxuries Act, 1987 ;
9. the Maharashtra Sales Tax on the Transfer of Property in Goods involved in the Execution of Works Contract (Re-enacted) Act,1989;
10. the Maharashtra Tax on Entry of Goods into Local Areas Act, 2002, and
11. the Maharashtra Value Added Tax Act, 2002.

A. Gist of Benefits

Dispute Period	Nature of Liability	Phase-II Payment	Phase-II Waiver
Upto 31st Mar 2010	Disputed Tax	60%	40%
	Interest	20%	80%
	Penalty	10%	90%
1st April,2010 to 30th June 2017	Disputed Tax	80%	20%
	Interest	30%	70%
	Penalty	20%	80%

Note 1- Percentage of disputed amounts

Note 2 – It may be noted that in the Ordinance there is no provision which provides any relief or waiver in respect of un-disputed tax

B. Who can take the benefits under the ordinance ?

The following categories of the assessee may prefer to avail the opportunity for settlement of tax, interest, penalty or late fee levied, payable, imposed, respectively, under the Relevant Act:-

1. the tax payer whose registration is continued after 1st July 2017;
2. the tax payer whose registration certificate under the Relevant Act was valid at any time on or before the 30th June 2017.
3. the tax payer whose registration certificate is cancelled at any time on or before the date of commencement of this Ordinance.
4. the tax payers who were never registered under any of the Relevant Act, but desire to avail the benefits under this Ordinance, shall also be eligible to make an application and subject to the conditions may settle the arrears of tax, interest, penalty or late fee payable for the periods ending on or before the 30th June 2017.

C. Applicability of Settlement Ordinance:-

1. This Ordinance shall be applicable in respect of the arrears of tax, interest, penalty or, as the case may be, late fee under various Acts administered by the MGSTD and the rules made or notifications issued under these Relevant Act.
2. Also, in respect of the aforesaid demand, in case, any amount is paid on or before the 31st March 2019, then the said amount shall not be considered as the requisite amount for the settlement of the arrears as per the provisions of the Ordinance
3. no arrears of tax, interest, penalty or late fee shall be settled under the Ordinance, in case the statutory orders are passed or the returns or the revised returns are filed after the 15th July 2019.
4. The complete waiver of late fee shall be available in respect of the returns for the period ending on or before 30th June 2017 and which are filed during the 1st April 2019 to 31st July 2019.

D. Time limit for submission of Application for Settlement and payment of the requisite amount –

1. The Ordinance provides for the settlement of arrears of tax, interest, penalty or, late fee in TWO PHASES.
2. First Phase will last for THREE MONTHS [Later extended one more month] and the Second Phase for ONE MONTH. The First Phase provides slightly higher waiver in respect of disputed tax, interest and penalty as compared to the waiver available in Second Phase.
3. Phase I period has expired on 31st July, 2019. Phase II of the Amnesty scheme has begun from 1st August, 2019 and shall close on 31st August, 2019. Hence, the last date for submission of application and payment of the requisite amount for Second Phase shall be the 31st August, 2019.

E. Arrears of tax, interest, penalty or late fee that may be settled under the Ordinance

1. The arrears of tax, interest, penalty and late fee which pertains to the period ending on or before 30th June 2017 shall only be available for the settlement.
2. The following amount of arrears of-

• the tax, interest, penalty or late fee payable as per any statutory order;
• the return dues i.e. the tax, interest or late fee admitted to be payable in the return or the revised return and said amount has been short paid or not paid;
• the amount of tax, interest or late fee determined and recommended to be payable by the auditor, in the audit report, submitted and accepted by the dealer but which has remained un-paid;
• the tax, interest, penalty or late fee for which the Nodal Officer has issued a notice, in relation to any proceedings under the Relevant Act;
• the tax, interest, penalty or late fee as determined to be payable by the assessee (i.e. as self-assessed) even no notice for initiation of any proceeding is issued by the Departmental authorities.

3. It is clarified that the tax for the purposes of this Ordinance, includes the surcharge, turn-over tax, additional tax, tax deducted at source, tax collection at source and by whatever name the tax is called.

F. Forms to be used for the settlement

Conclusion

This scheme has been introduced for the mutual benefit of both, the department and the tax payer. With the help of amnesty scheme, businesses can now proceed to avail the benefit by early resolution/closure of pre-GST regime disputes under various acts.