The proceeds from the direct tax dispute resolution scheme, ‘Vivad se Vishwas’, will buoy the direct tax collection in the current fiscal as it has yielded nearly `95,000 crore in tax payable thus far from 1.18 lakh disputes that opted for the plan, PC Mody, chairman of the Central Board of Direct Taxes (CBDT), told FE.
The last date of payment is March 31 but the quantum of tax accruing to the government would be lesser due to pre-payment of tax demand in earlier stages of litigation by taxpayers. “Essentially, what you have here is that nearly a fourth of disputes getting resolved which makes the scheme immensely successful,” Mody said.
The scheme was launched in the last Budget with the aim to liquidate nearly 5 lakh cases pending at different forum. These cases involved nearly `10 lakh crore in tax demand.
Mody said that the information of financial transaction available with the taxpayers now, which is provided by the government on the income tax return filing portal, would enable and compel correct disclosure of taxable income. This, he added, is the reason the department has set a 22% growth target for tax collection in next financial year. “Statistics apart, it is the ground level experience which also matters with respect to ease of compliance, certainty, and taxpayers’ experience vis-a-vis the department. The introduction of faceless assessment, appeal and penalty will be a game changer,” Mody said.
In fact, these measures are yielding results as the direct tax collection this year till end of January has narrowed the gap and is trailing the mop-up in the corresponding period last year by 6.7%. The budget estimate for direct taxes in FY22 stands at `11.08 lakh crore.
Referring to the proposed move of making the tax tribunal (ITAT) faceless, Mody said that it was part of the plan to make the tax administration completely faceless, random and anonymised. “Right now what is happening is certain ITAT benches overloaded with work while some others are starved. it would expedite the disposal of appeals and bring in uniformity and transparency,” he added.
The Budget has also proposed abolition of the settlement commission while setting up and alternate dispute resolution committee for smaller taxpayers. “The idea was to create a structure for smaller taxpayers which contribute to majority of tax disputes. Although alternate dispute resolution mechanism has been done away for bigger taxpayers, they continue to have the remedy of the usual appellate route.