The Income Tax Department has notified the rules and forms for the direct tax dispute resolution scheme Vivad se Vishwas, and launched an electronic facility for taxpayers willing to avail the scheme.
About the Vivad se Vishwas scheme:
- Under the scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year.
- An additional 10 percent of disputed tax after March 31, will have to be paid over and above the tax liability.
- However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered.
- The scheme would remain open till June 30. Taxpayers in whose cases appeals are pending at any level can benefit from this scheme.
Objectives of the Schemes
- It aims at reducing vexatious litigations in a speedy manner that are related to the direct taxes payments.
- It is proposed to cover tax disputes pending at the level of commissioner (appeals), Income Tax Appellate Tribunals (ITAT), high courts and the Supreme Court.
- As per several reports, over Rs 9 lakh crore worth of direct tax disputes are pending in the courts.
- The government aims to recover a big share of the amount in a swift and simple way.
- It also aims to bridge the gap with regard to shortfall in revenues, especially tax revenues.
- Tough for taxpayers will to opt for the scheme: Notification of rules and forms merely 10 working days before the initial deadline will make it tough for taxpayers willing to opt for the scheme. Additional tax burden on taxpayers: The scheme, open till June 30, imposes additional burden of tax in case payment of disputed tax is made after 31st March 2020.
- Difficult to implement: Practically, it may be extremely difficult both for the taxpayers as well as designated authorities to examine all the cases and make payment on/before 31st March 2020.
- Turmoil due to the global pandemic makes matters worse as various offices and tax practitioners have started working from home.
- No further recourse available: Given that settlement under VsV (Vivad se Vishwas) would mean no further recourse available, no taxpayer would want to leave any issue open in the process.
- The scheme designed to provide relief to taxpayers stuck in long drawn litigation becomes less attractive and practically very difficult to implement owing to the stringent deadlines, which must be extended by the government.
Also read: Changes In Vivad Se Vishwas Bill