Amnesty in debt cases
The Union cabinet on Wednesday approved the widening of the scope of the “Direct Tax Vivad se Vishwas Bill, 2020” to also cover cases pending in debt recovery tribunals (DRTs). The bill, introduced in the Lok Sabha during the ongoing budget session, sought to substantially reduce the huge tax arrears which are locked in litigation between the taxpayers and the revenue at the level of Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), high courts and the Supreme Court.
The amount of disputed direct tax arrears totalled Rs 9.32 lakh crore till November 2019. Briefing about the cabinet decisions, information and broadcasting minister Prakash Javadekar said after the budget, the finance minister held discussions with stakeholders and sought suggestions from them.
“And on the basis of the suggestions, there are now new amendments to be moved in this session of Parliament,” he said, adding the scope of the scheme has been enlarged.
As per the proposed amendments, now income tax disputes in arbitration, various tribunals, courts and DRT cases can be settled, the minister said. Even the search and seizure cases where the recovery is below Rs 5 crore, too, could be redressed under the scheme, he added.
As per the bill, the biggest advantage of the scheme is that the taxpayer would be required to pay only the amount of the disputed taxes. The taxpayer will get complete waiver of interest in case he pays the due amount by March 31, 2020.
For disputed penalty, interest and fee not connected with the disputed tax, the taxpayer would be required to pay only 25 per cent to settle the dispute. The amount to be paid would be higher, in case the taxpayer opts for the scheme late and pays after March 31, 2020. This provision is aimed at encouraging the taxpayers to settle the dispute within the current financial year itself which ends on March 31, 2020.