Nearly one-fifth of about 5 lakh entities locked in tax litigation with the government have opted for a dispute redressal scheme, helping settle around Rs 83,000 crore of contested amount, the Union Finance Secretary said on Sunday.
Finance Minister Nirmala Sitharaman had in her budget for fiscal starting April 2020 announced a Vivad Se Vishwas Scheme to settle pending disputes relating to direct taxes. It was an attempt to release Rs 9.32 lakh crore blocked in about 4.8 lakh appeals pending at various appellate forums.
Following the surge in Vivad Se Vishwas applicationd that got filed in December 2020 and demands of taxpayers, he said the government has extended the scheme by a month till Jan. 31.
The entities opting for the scheme have to pay requisite tax and litigations are closed and penal proceedings dropped.
“Under this exercise, more than Rs 1 lakh crore tax demands, which arose because of incorrect entries, have been cleaned up,” he said.
The litigation and appeal cases are before the commissioner (appeals) and tax tribunals to higher courts and in arbitration.
Once an entity opts for the Vivad Se Vishwas scheme and pays the due tax, the cases are deemed to have been withdrawn from the forums, interest, penalty and prosecution are also withdrawn.
“We have extended the date till Jan. 31. So, we hope to achieve a much higher figure. So that substantial number of cases which are pending will get settled under Vivad Se Vishwas Scheme,” the secretary said, adding a large proportion of entities opting to settle disputes is from the private sector.
The scheme provides for settlement of disputed tax, disputed interests, disputed penalty or disputed fees in relation to an assessment or reassessment order on payment of 100% of the disputed tax and 25% of the disputed penalty or interest or fee.
. Read more on Business News by BloombergQuint.
