Vivad Se Vishwas Scheme, 2020

Overview:

In line with the announcement made in Budget 2020 by Hon’ble Finance Minister of India, the Government of India has notified the Direct Tax Vivad Se Vishwas Act, 2020 on March 17, 2020 and the Direct Tax Vivad Se Vishwas Rules, 2020 on March 18, 2020. The Scheme aims to provide resolution mechanism for pending direct tax disputes across various appellate.

Cases Eligible under the Scheme for settlement:

• Appeals/writ filed on or before January 31, 2019 and pending.
• Orders for which time for filing appeal has not expired on aforesaid date.
• Cases pending before DRP on aforesaid date
• Cases where Tax payer has filed revision under section 264
• Search cases if the disputed tax is less than INR 5 Crore

Nature of Disputed amount covered:

• Disputed Tax
• Disputed Penalty
• Interest thereon
• Disputed Fees
• Disputed TDS and TCS

Our Comment

During last year, the government has brought Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019(SVLDRS), related to Indirect Taxes, which gave higher benefit to Corporates who are opted to clear their legacy cases pending in old tax regime (Excise and Service Tax). It provided substantial relieve from payment of disputed tax and thus, become popular among corporate.

Unlike this, Vivad Se Vishwas Scheme, 2020 does not provide any relieve from disputed taxes, though it provides relieve from Interest and Penalty. Thus, it may take time for Companies to decide if they are going to get benefited. The Companies shall evaluate its pending cases one by one at the earliest so that they can avail higher benefit from the scheme by filing the application before March 31, 2020.

However, given the current unrest due to COVID-19, it may be reasonable to expect that the government may extend the date of March 31, 2020.

From,

Pankaj Jain & Team

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