The Industry players have urged the government to introduce an amnesty scheme to resolve long-standing disputes under the Customs laws in the upcoming interim Budget. Experts say that an amnesty scheme, along the lines of ‘Sabka Vishwas’ and ‘Vivaad se Vishwas’, would help in ending long-drawn litigation under the Customs laws, and will particularly help small businesses to get rid of their past baggage of disputes.
The government introduced ‘Sabka Vishwas’ and ‘Vivaad se Vishwas’ schemes in 2019 and 2020, respectively to reduce the long-pending litigation in central excise, service tax and direct tax disputes. The two schemes have fetched revenues of over Rs 90,000 crore for the government.
An estimated 30,000 Customs cases are pending in various courts, involving an amount of more than Rs 40,000 crore, which may be reduced substantially with the operationalisation of an amnesty scheme, thereby increasing revenue for the government and providing much-needed relief to businesses.
The amnesty scheme will settle legacy disputes of customs classification, disagreement over valuation and rules of origin, among others. An amnesty scheme is much needed as the businesses can pay past customs dues and settle disputes.
The Finance Ministry had already introduced an amnesty scheme for traders who defaulted on export obligations under the Advance Authorisation (AA) and EPCG (Export Promotion Capital Goods) schemes.
Under the scheme, all pending cases of the default in meeting export obligation (EO) of certain authorisations can be regularised by the authorisation holder on payment of all customs duties that were exempted in proportion to unfulfilled EO, with an interest capped at 100%.
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