Context

Sabka Vishwas Scheme was announced in the Union Budget 2019. It has now been notified and will be operationalized from 1st September 2019.

About

Sabka Vishwas Scheme

• It is a Legacy Dispute Resolution Scheme.
• The scheme targets those taxpayers who want to close their pending disputes related to Service Tax and Excise Tax (now subsumed under Goods and Services Tax). Hence, the term ‘legacy’.
• This scheme offers amnesty (official pardon) to those who wish to disclose any previously undisclosed tax liability without any penalty or prosecution.
• The two main components of the Scheme are dispute resolution and amnesty.
  • 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, fine, penalty, In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.
• The Scheme is especially tailored to free the large number of small taxpayers of their pending disputes with the tax administration.

Taxes subsumed into GST

At the Central level, the following taxes are being subsumed:

1. Central Excise Duty,
2. Additional Excise Duty,
3. Service Tax,
4. Additional Customs Duty commonly known as Countervailing Duty, and
5. Special Additional Duty of Customs.

At the State level, the following taxes are being subsumed:

1. Subsuming of State Value Added Tax/Sales Tax,
2. Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States),
3. Octroi and Entry tax,
4. Purchase Tax,
5. Luxury tax, and
6. Taxes on lottery, betting and gambling.