The scheme, announced in the recent Budget, seeks to dispose of nearly 4.8 lakh cases, involving disputed tax amounts of Rs 9.32 lakh crore (as on November 30, 2019).
To maximise revenue mobilisation via the direct tax ‘Vivad Se Vishwas’ scheme, the Central Board of Direct Taxes (CBDT) has made tax officers’ performance under the scheme a vital criterion for their annual appraisals for 2019-20 and future postings. “Details of the number of disputed cases, amount involved in disputed cases as well the number of cases resolved and the amount collected under the scheme may be reported in the self-appraisal,” CBDT said. The performance of officers in respect of the scheme “will be specifically commented upon by the reporting and the reviewing officers and shall be an important factor in determining their future postings,” the tax board said in an office memorandum.
Assessing officers, range heads and other zonal heads would come under the revised appraisal norms.
The scheme, announced in the recent Budget, seeks to dispose of nearly 4.8 lakh cases, involving disputed tax amounts of Rs 9.32 lakh crore (as on November 30, 2019). All direct tax-related cases pending before the commissioner-appeals, Income Tax Appellate Tribunal, High Courts or Supreme Court as on January 31, 2020 are eligible for the scheme. Last week, the Cabinet widened the scope of the scheme by allowing cases under debt recovery tribunals too eligible for resolution.
The scheme provides that if a taxpayer avails it by March 31, 2020, he would get complete waiver of interest and penalty. However, a taxpayer who chooses the scheme post this cut-off date will have to pay the disputed tax and 10% of it extra. Further, if the tax arrears relate to disputed interest or penalty only, then only 25% of disputed penalty/interest is payable if the scheme availed by March 31. Cases coming for resolution after this date would have to pay 30% of penalty and interest, the Bill provisions said.
However, certain cases including tax arrears relating to undisclosed foreign income/asset, assessment or reassessment made on the basis of information received under DTAA are out of the ambit of the scheme. Further, cases where prosecution for any offence under the Indian Penal Code/Prevention of Money Laundering Act/Prohibition of Benami Property Transactions Act has been instituted or a person who has been convicted under the Acts can’t avail the scheme.
The scheme is modelled on a similar scheme for settling indirect tax disputes, the window for which closed on January 15. The government has said that nearly 95% of 1.9 lakh outstanding cases were resolved under that scheme resulting in over Rs 35,000 crore of revenue for the government. The total revenue stuck in such cases was, however, estimated to be Rs 3.6 lakh crore.
Explaining the purpose of the Direct Tax Vivad se Vishwas scheme, the government has said that amounts locked in direct tax disputes are nearly equal to the total direct tax collections for a year. Further, it added that tax disputes consume copious amounts of time, energy and resources both on the part of the government as well as taxpayers.
Moreover, they also deprive the government of the timely collection of revenue. Therefore, there is an urgent need to provide for resolution of pending tax disputes. This will not only benefit the government by generating timely revenue but also the taxpayers who will be able to deploy the time, energy and resources saved by opting for such dispute resolution towards their business activities,” it said.