Direct Tax Vivaad Se Vishwas Bill approved
A bill to provide an opportunity for taxpayers to settle their tax disputes by paying just due taxes with complete waiver of interest and penalty by March 31 was approved by the Lok Sabha on 4 March 2020. The Direct Tax Vivaad Se Vishwas Bill, 2020, which was introduced by Finance Minister Nirmala Sitharaman in the House on March 2, was passed amid din.
- As many as 4.83 lakh direct tax cases worth Rs 9.32 lakh crore are locked up in various appellate forums such as Commissioner (Appeals), ITAT, High Courts, Supreme Court and Debt Recovery Tribunals. Also in search and seizure operations where the recovery is up to Rs 5 crore, this scheme can be availed once the Bill is passed by Parliament.
- Under the proposed scheme, taxpayers willing to settle disputes shall be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year, following which a 10 per cent additional disputed tax shall have to be paid over and above the tax liability.
- Further, where arrears relate to disputed interest or penalty only, then 25 per cent of disputed penalty or interest shall have to be paid if the payment is made by March 31, beyond which the same shall be enhanced to 30 per cent. The scheme would remain open till June 30, 2020.
- A taxpayer shall be required to pay 110 per cent of the disputed tax (the excess 10 per cent shall be limited to the amount of related penalty and interest, if any) and 30 percent of penalty, interest and fees in case of payment after March 31, 2020.
- Those who avail this scheme after March 31, 2020 will have to pay some additional amount. The scheme will remain open till June 30, 2020.
- Industry has welcomed the scheme and tax experts have said that entities are keen to settle old tax disputes where a lot of interest has accumulated.
- The Revenue department has asked field officers to go whole hog to make the scheme successful by approaching the individuals or entities and persuading them to opt for the scheme.
- Seeking to widen the scope of the scheme, the Cabinet had last month approved widening the scope of the scheme to cover most of the disputes including those in arbitration.