QUESTION

Sabka Vishwas Scheme 2019 Letter is issued by Audit Group demanding the outstanding Service tax which is declared in Service Tax return Aprox. 10 Lacs ( Letter is issued in April-2019 i.e. Prior to 30.06.2019). However we have paid the said Service tax Rs. 10 Lacs after filing Service tax returns i.e. Delayed payment. For which details were not available with them. Hence there was demand letter. Subsequently we have provided them the copies of Service tax paid challan which were already paid ( before announcing this scheme and in subsequent period of ST returns). Now audit team has asked to deposit the Interest of Rs. 2.12 Lacs which is payable on delayed payment of Service tax amount and we also agree that same is payable as we have deposited the service tax which is declared in ST return late. We wanted to know whether the above case will be quality for Scheme or NOT? If yes then under which clause because there are two separate clause 1) Investigation & Audit - which covers that audit team ask for documents to produce etc. and another point is 2) Arrears - but in this case we presume that tax due should be declared in return ? in our case tax due is declared but same is paid already before announcing the scheme and interest is not declared ( as there was no provision to declare the interest as well as it was not possible to declare in ST return) We need your valuable advice at earliest in matter. If require we may provide copy of letter recd from audit team

ANSWER

Facts of the case:  Letter issued by Audit Group demanding the outstanding Service tax which is declared in Service Tax return, which was already paid before issue of impugned letter. However they demanded interest of Rs 2.12 lakhs on delayed payment.

Law Applicable: Section 120 of Finance Act 2019
(c) 'amount in arrears' means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of'
(i) no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal; or
(ii) an order in appeal relating to the declarant attaining finality; or

(iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019,wherein he has admitted a tax liability but not paid it;

Circular No. 1071/4/2019-CX.8 Dated 27/08/2019 clarifies that:
5(iii) If the amount of duty being litigated is 'nil', either because the show cause notice was only for penalty or because the duty was deposited at any subsequent stage, and only penalty is being contested, then the taxpayer does not need to deposit anything to settle his case. However, the taxpayer would have to make a declaration under this Scheme.

As per FAQs issued by CBIC on SVLDRS 2019:
Q27. What are the benefits available under the Scheme?
Ans. The various benefits available under the Scheme are:
• Total waiver of interest and penalty
• Immunity from prosecution

Interpretation: Your case falls in category of Audit/Investigation because Audit was already conducted before 30-06-2019 and amount is also quantified.
Category of Arrears will not be applicable because the tax is already declared as well as paid while filing delayed returns.

Conclusion: Hence as tax payable in your case is NIL thus as per above said Circular and FAQ entire interest amount is waived off.