The central government is all set to get the’ Vivad se Vishwas’ (from dispute to belive) bill passed in Loksabha. If you are wondering what the bill is all about then let me tell you its related to tax disputes.
The Union Finance Minister Nirmala Sitharaman made the announcement of the scheme during her budget speech on February 1, 2020. The scheme aims to get settlement of income tax disputes in a quick manner. The bill is already introduced in the Parliament.
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What The Scheme Would Do?
As per the scheme, taxpayers whose tax demands are locked in dispute in multiple forums, can pay due taxes by March 31, 2020, and get a complete waiver of interest and penalty.
The scheme would be similar to the “Sabka Vishwas” legacy dispute resolution scheme. Sabka Vishwas scheme was aimed at reducing disputes related to excise and service tax payments.
How The Settlement Would Happen?
The settlements under the scheme would be done as follows:
- In case it is just the interest and the penalty which is in dispute, the taxpayer will have to pay 25% of the disputed amount till March 31, and subsequently, it will be 30%.
- If a taxpayer is not able to pay within the March 31 deadline, he gets a further time till June 30, but in that case, he would have to pay 10% more on the tax.
- In case it is just the interest and the penalty which is in dispute, the taxpayer will have to pay 25% of the disputed amount till March 31, and subsequently, it will be 30%.
The scheme would be beneficial for those whose cases of tax were pending till 31 January 2020 in the Commissioner (Appeals), Income Tax Appellate Tribunal, High Court or Supreme Court. Pending appeals in such cases may be related to tax disputes, penalties or interest. It can also be related to assessment or re-assessment.
What Is The Need Of The Scheme?
As per the latest count, nearly 4 lakh 83 thousand cases of direct tax are pending in various forums of appeal, commissioner appeals, High Court with the Income Tax Appellate Tribunal and the Supreme Court.
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The scheme would put an end to those more than four and a half lakh direct tax pending cases. It would also help in increasing revenue and bridging the fiscal deficit.
Inputs from Taxscan and Jagaran.com
