Vivad se Vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. Given below is all the aspects you have to know about this amnesty scheme:
What is Vivad se Vishwas scheme?
Under this scheme, taxpayers whose tax demands are locked in dispute in multiple forums, can pay due to taxes by March 31, 2020, and get a complete waiver of interest and penalty. If a taxpayer is not able to pay within the deadline, he gets a further time till June 30, but in that case, he would have to pay 10% more on the tax.
The Vivad se Vishwas scheme is similar to the ‘Indirect Tax, Sabka Vishwas’ scheme, which was introduced by Finance Minister during her maiden budget presentation in July 2019. The “Sabka Vishwas” legacy dispute resolution scheme was aimed at reducing disputes related to excise and service tax payments.
Vivad Se Vishwas Scheme: Salient Features
• The Vivad Se Vishwas scheme offers to settle pending direct tax-related disputes.
• The scheme aims to resolve 483,000 direct tax-related disputes pending in various appellate forums.
• The scheme offers waivers on interest and penalty if the disputed tax amount is paid before March 31, 2020.
• If a taxpayer is not able to pay direct taxes by March 31st then, he will get further time till June 30th. However, in that case, he would have to pay 10 percent more on the tax.
• In case it is just the interest and the penalty which is being disputed, the taxpayer will have to pay 25 percent of the disputed amount till March 31, after which, it will be 30 percent.
Tax disputes that can be settled under Vivad se Vishwas scheme
All of the cases related to direct tax pending before Commissioner (Appeals), Income Tax Appellate Tribunal, high courts or the Supreme Court as on January 31, 2020, can be settled under the scheme.
Also, if the tax dispute relates to only disputed penalty or interest amount then taxpayers availing the scheme will have to pay only 25% of the disputed amount before March 31, 2020. And in case you approach the taxman post this cut-off date for the resolution then penalty and interest equivalent to 30% of the disputed amount shall be payable.
When announcing the scheme in the Budget 2020, Sitharaman said the scheme primarily puts its focus on trust-building. And it would not be open-ended and closure of the scheme shall be notified at a later date.
Citing the rationale of the scheme, the government said that the disputed amount is equivalent to one-year’s direct tax revenues for the center. Further, it added that settling then involves a huge amount of energy, resource and time on the part of both taxpayers and government.
Also Read: How to deal with tax-related frauds
