With 13 days to avail full benefit of direct tax dispute resolution scheme- Vivad se Vishwas, the government has notified the much awaited forms and rules on Thursday. The facility for online filing of such forms on the portal was also subsequently enabled by the income tax department.
The income tax department notified a 5-stage process of making declaration under the Scheme, with as many as five forms released.
However, experts pointed out an anomaly in rules, where a time frame of 30 days has been provided to make tax payment since determination of tax liability as against 15 days mentioned in the Act, which was notified on Wednesday.
The eligible assesses are required to submit their declaration in Form 1 to the designated authority, which seeks detailed information relating to the nature of tax arrears, assessment year, details of order, amount of tax arrears already paid, etc.
It also provides for computation of ‘tax payable’ under different scenarios for declarations for instance, relating to disputed tax/ TDS/TCS/ disputed interest/ disputed penalty or fee.
In addition, an undertaking on waiving the right to seek or pursue any remedy or any claim in relation to tax arrears under any law needs to be furnished by the declarant in Form 2.
The Scheme is open till June 30 and an additional 10% needs to be paid for taxes paid after March 31. There are more than 400,000 such cases eligible to avail of the scheme, and they involve at least Rs 9.3 trillion.
Thereafter, the designated authority will pass an order within 15 days in Form 3, directing the assesses to make payment of sum payable after adjusting the amounts already paid. The assesses have been provided a 30-day window to make payment to the designated authority after that and intimation of payment needs to be made in Form 4. Under that, details of payment like the serial number of challan, date of payment, amount, etc is to be mentioned.
Amit Maheshwari, partner, AKM Global said that there appears an error in Form 3, the certificate by the designated authority. “The due date for deposit of tax is written as 30 days from receipt of certificate, however the Act mentions that the time limit is 15 days. There seems to be an error, which the government is expected to rectify,” said Maheshwari.
Finally, in Form 5, the designated authority will issue a certificate granting immunity and specifying the details of dispute settlement.
Rakesh Nangia, chairman, Nangia Andersen Consulting said that the government has notified the forms and rules merely 10 days before the due date, if taxpayers want to obtain maximum benefits to the taxpayers desirous of availing the scheme. “Therefore, practically, it may be extremely difficult both for the Taxpayers as well as Designated Authorities to examine all the cases and make payment on/ before 31st March 2020. Further, the turmoil due to the global pandemic makes matters worse as various offices and tax practitioners have started working from home.” The scheme designed to provide relief to taxpayers stuck in long drawn litigation becomes less attractive and practically very difficult to implement owing to the stringent deadlines, which must be extended by the Government, he added.
Frank D’Souza, Partner and Leader Corporate & International Tax , PwC India said that,”will be important that the e-interface operates smoothly, especially given the limited time in hand where these forms are to be furnished.” D’Souza added that given the limited time available to avail of the benefits of the March 31, 2020 deadline, it remains to be seen if the date would get extended beyond March 31.
Rajat Mohan, partner, AMRG & Associates said that although the scheme will help reduce disputes and aid revenue collection, but the pandemic covid-19 and volatile market sentiments is expected to fail the scheme if date of deposit is not extended beyond 31 March. “Notifying rules and forms is expected to set things in motion for taxpayers, however ride ahead is bumpy for the scheme due to the play of coronavirus,” said Mohan.