I-T dept lines up Rs 1-trillion PSU tax row under 'Vivad se Vishwas Bill'

Responding to the Vivad se Vishwas Bill introduced in the Lok Sabha earlier this month, the Income-Tax Department has identified at least 50 central and state public sector undertakings (PSUs) to be covered under the litigation settlement scheme. These state-run firms have been embroiled in legacy tax rows involving an estimated disputed amount of Rs 1 trillion, according to sources in the know.  

The action plan came up in a video-conferencing discussion on Thursday between the  top officials of the Central Board of Direct Taxes (CBDT) and  Revenue Secretary Ajay Bhushan Pandey.

The Union Cabinet had on Wednesday expanded the scope of the scheme to cover litigation pending even in debt recovery tribunals (DRT). After the amendment, the scheme will also cover searches and seizure with recovery up to Rs 5 crore.

The scheme is yet to come into effect as the Vivad se Vishwas Bill is pending in Parliament. The amended version would now be tabled in Parliament again. 

The Budget session would re-convene next month. Sources said assessment wise details of PSU firms had been prepared including their assessment year, status of appeal, disputed demand, amount collected and pending along with the refund, if any. SBI, LIC and ONGC are among the major PSUs with pending direct tax disputes estimated at Rs 30,000-40,000 crore, said an official dealing with the matter. The tax department will approach them to settle their tax matters under the new legislation, he added.

The meeting on Thursday also decided to start an intensive outreach programme for the industry and eligible taxpayers so that they respond to the scheme.

Meanwhile, senior officials are in the process of collating information linked to eligible taxpayers. “Since we sought details from various judicial forums including dispute resolution tribunals, the interested entity/persons should go through the nuances of the scheme to check whether their tax cases are eligible to come under the scheme,” said an official privy to the plan.

Meanwhile, considering the importance of the scheme, the CBDT is learnt to have made the scheme's success directly proportionate to tax officers' future posting. The performance of officers will be specifically commented upon after the review and shall be an important factor in determining their future posting.