The income tax (I-T) department has so far approached 5,627 entities to avail of the Vivad se Vishwas, or direct tax dispute settlement, scheme. Those approached include large taxpayers, mostly foreign banks, which have disputes relating to international taxes.
Of this, a total 1,730 assessees, involving a tax demand of Rs 1, 578 crore, have agreed to come under the scheme, according to a preliminary report prepared by the I-T department.
The report had been discussed in a meeting held on February 28, called by the oversight committee, (an internal panel formed to supervise the Vivad se Vishwas scheme).
The committee was being apprised of various strategies, latest number of pending appeals in different judicial forums and further action plan to make the scheme a success, said a tax official in know.
The report highlighted that total 80,332 appeals of direct taxation, involving tax effect of Rs 4.5 trillion, have been pending before forums, including commissioner appeals, income-tax appellate tribunals, high courts, the Supreme Court and dispute resolution panels.
Earlier, the impression was that over Rs 9 trillion of tax demands have been stuck at various judicial forums concerning 480,000 cases.
Sources say that the government is eyeing 100 per cent resolution under the scheme and expects to garner at least Rs 2 trillion by the end of this month. However, the clarity would come only by middle of the month when they would get to know about the feedback of the scheme, said the official cited above.
Further, in the report, tax department briefed the panel about the communication with large taxpayers/foreign companies and whether they are eligible to take this route.
According to the tax authorities, most of the large taxpayers who have rows relating international tax have been contacted and the details of the scheme have been explained to them. To this, the assessees/entities concerned stated that they will discuss with their top management and revert.
“In most of these cases, the disputed issues are reoccurred and they had gone in favour of assessee which the department challenged in higher forums. However, in such cases, too, the companies concerned have been briefed and explained that how they can avail the benefits of the scheme and reduce litigations. However, no specific queries have been raised by them regarding the scheme, according to the report.
Sources, however, say that foreign firms may not be enthusiastic to opt for the scheme as their cases are mostly on legal grounds which they expect to win in the higher courts.
Officials said those with disputes relating to evasions are likely to choose the scheme.
Meanwhile, Mumbai, which contributes 37 per cent of the total direct tax collection, has 448 disputed cases with a tax effect of Rs 807 crore, pending before Income Tax Appellate Tribunal (ITAT) Mumbai.
These tax disputes pertain to bogus share capital and penny stocks where the department has a strong case, said the official cited above.
Moreover, the report also talks about the statistics showing stakeholders engagement at different levels. The income tax department is currently working on sensitising the target group by meeting professionals, doctors and chartered accountants.
The outreach programme has started nationwide for trade/industry and several associations. Besides, the I-T department is organising seminars with various stakeholders, including lawyers, information technology professionals and others.