NEW DELHI: The Direct Tax Vivad se Vishwas Bill, 2020, tabled in Parliament by finance minister Nirmala Sitharaman on Wednesday offers an opportunity to assessees to clear long-pending disputes.
The scheme is intended to mop up Rs.9.32 lakh crores locked in nearly 4.85 lakh disputes for the last several years. This will also free up courts and tribunals crippled by prolonged litigation as this applies to all direct tax-related cases pending before the Commissioner (Appeals), Income Tax Appellate Tribunal, high courts or the Supreme Court as on January 31, 2020.
According to a report in Financial Express, the scheme provides that if a taxpayer avails it by March 31, 2020, then he would get complete waiver of interest and penalty. However, a taxpayer who chooses the scheme post this cut-off date will have to pay the disputed tax and 10% of it extra.
Further, if the tax arrears relate to disputed interest or penalty only, then only 25% of disputed penalty/interest is payable if scheme is availed by March 31. Cases coming for resolution after this date would have to pay 30% of penalty and interest.
Introducing the Bill, finance minister Nirmala Sitharaman said it emphasises on trust building. The scheme, she said, would not be open-ended. The government will later notify the end date for the scheme.
“This can be a very beneficial scheme for settlement for cases such as additions of unexplained cash deposited during demonetisation period, additions for penny stocks, etc. where factually the taxpayers have high exposures. It would be beneficial for such taxpayers, to pay the tax amount and settle the disputes without imposition of interest and penalty,” the FE quoted Rakesh Nangia, chairman, Nangia Andersen Consulting, as saying.
If the scheme is successful in collecting revenue, it will offer relief to the Narendra Modi administration, which has estimated that its fiscal deficit for FY20 would slip from the earlier projected 3.3% of GDP to 3.8% of GDP (with inputs from Financial Express and Livemint)