Making the tax dispute resolution scheme attractive

The Union Cabinet on Wednesday expanded its scope to hide litigation pending in arbitration forums and debt recovery tribunals (DRTs). The scheme also will include cases associated with revision and small-value search disputes.

The Cabinet also reduced the disputed amount by half for those assessees who got favourable orders but the income-tax department challenged those.

The move comes every week after minister of finance Nirmala Sitharaman introduced the tax Vivad se Vishwas Bill, 2020, within the Lok Sabha to resolve disputed tax cases, amounting to Rs 9.3 trillion, giving effect to the Budget announcement.

The scheme offers waiver of interest, penalty, and prosecution for settling tax disputes. it had been earlier limited to cases pending before the commissioner (appeals), the tax Appellate Tribunal, high courts or the Supreme Court as of January 31, 2020. Now, an entire waiver of interest and penalty are going to be given if tax dues are paid by March 31. a further 10 per cent of the disputed amount will need to be paid then .

Disputes associated with search and seizure cases where recovery is below Rs 5 crore also will be haunted under this scheme. the entire purpose, Javadekar said, was to enlarge the scope of the Bill.

On the inclusion of small-value search cases, he said, “This will unlock stuck tax revenues and help in reducing the pending litigation. tons of search cases find yourself in litigation and this is often a welcome step.”

While the scheme is open till June 30, those availing of it'll tend an entire waiver of interest and penalty if they pay the whole amount by March 31. within the case of tax arrears concerning only disputed interest or penalty, 25 per cent of the disputed penalty/interest will got to be paid while settling appeals till March 31, and 30 per cent if payment is formed then.