ITDRS, 2016 shall not apply or not be applicable in the following cases –
the impugned order is in respect of search and seizure proceeding; or
prosecution for any offence punishable under the Act has been instituted before the 1st day of June, 2016; or
the impugned order is in respect of narcotic drugs or other prohibited goods; or
impugned order is in respect of any offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985 or the Prevention of Corruption Act, 1988; or
any detention order has been passed under the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974.
The scheme shall not be applicable to tax disputes pending before Tribunal or any court or any other authority except the Commissioner (Appeals) .
(6) How to make declaration (Section 214)
Any assessee whose appeal is pending as on 1.3.2016 (impugned order) can make a declaration
Declaration has to be made to or before the designated authority
Declaration has to be made on or before 31st December, 2016
Form and manner of declaration, acknowledgement and order of discharge shall be prescribed
Designated authority shall acknowledge the declaration, as may be prescribed
Declarant shall be required to pay the following sums, within 15 days of the receipt of acknowledgment –
Interest thereon as per Act
Penalty equivalent to 25% of the penalty imposed in impugned order
Declarant shall intimate about the payment, as aforementioned to the designated authority within 7 days of making the payment giving details of such payment alongwith proof of payment.
On receipt of intimation of payment, designated authority shall pass on order of discharge of dues in prescribed manner.
(7) Grant of Immunity (Section 216)
Once order of discharge is issued under section 214, it shall have the following effect–
Appeal pending before the Commissioner (Appeals) shall stand disposed off
Declarant shall get immunity from all proceedings under the Act in respect of subject indirect tax dispute for which declaration is made
Declaration shall become conclusive upon issuance of order
No matter relating to the impugned order shall be reopened thereafter is any proceedings under the Act or before any authority or Court.
(8) Consequences of Order (Section 217)
On issuance of order, though the dispute under the impugned order shall stand concluded, it will be subject to the following consequences –
Any amount paid in pursuance of declaration shall not be refunded. Thus, no refund, whatsoever shall be allowed, of the amounts deposited under the scheme. The assessees should therefore, take a considered call to opt for and pay the disputed amount under the scheme.
Order shall not be considered or deemed to be an order on merits
Order has no binding effect.
Scheme should not be construed as conferring any benefit, concession or immunity on / to the declarant other than what is stipulated in section 2016.
(9) Rules making power (Section 218)
For the purpose of carrying out / implementing the ITDRS, 2016, Central Government is to make the rules for the following matters –
the form and the manner in which a declaration may be made under sub-section (1) of section 211;
the form and the manner of acknowledging the declaration under sub-section (2) of section 211;
the form and the manner of issuing an order of discharge under sub-section (4) of section 211;
any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules
Rules framed under the scheme shall be required to be laid before both the houses of Parliament –
(a) soon after they are made
(b) for a total period of 30 days comprised in one or more session
(c) and shall have effect subject to modification or annulment as agreed by the Parliament.
It is expected that CBEC shall soon issue the scheme / rules for notifying the scheme and forms.
It may be noted that once the scheme is opted by the assessee, he can not contest on any ground for any dispute. Issues such as benefit of Cenvat credit, cum-tax benefit, abatement, threshold exemption etc. also can not be raised. Moreover, if amount has been deposited, it can not be claimed as refund.