Industry on Monday asked Finance Minister Nirmala Sitharaman to tweak the Bill on settling direct tax disputes by reducing the amount of tax under the scheme on the lines of a similar one for indirect taxes announced in the previous Budget.
Sitharaman on Monday met industry representatives on the scheme that provides opportunity to taxpayers to pay outstanding taxes and get waiver of interest and penalty.
Sources in the Federation of Indian Chambers of Commerce and Industry (Ficci) said the main lacuna of the scheme was that 100 per cent of the disputed tax had to be paid.
On the other hand, a similar scheme to settle pre-GST excise and services tax dispute had a provision to reduce tax liability by half.
The chamber recommended that reduction of tax should also be provided under the direct tax scheme.
The Direct Tax Vivad se Vishwas Bill offers waiver of interest, penalty and prosecution for settlement of these disputes pending before the commissioner (appeals), Income Tax Appellate Tribunal (ITATs), high courts or the Supreme Court as of January 31.
While a complete waiver of interest and penalty will be given in case of payment made by March 31, an additional 10 per cent of the disputed amount will have to be paid after that.
Separately PHD Chamber of Commerce President D K Aggarwal in a statement said that the last date for the scheme should be extended by a month till April 30.
The scheme “will benefit many taxpayers and can generate more than Rs 2 trillion for the government in the coming times if it is broadened and exclusions are minimum under this scheme,” said Aggarwal.
Sources at Ficci said the deadline for filing declaration should be March 31, instead of payment of taxes.
They said the scheme should also cover those taxpayers who have approached the dispute resolution panel, but have not filed appeal before the Commissioner of Income Tax (Appeals).
About 500,000 cases involving Rs 9 trillion direct taxes are locked up in litigation. The scheme cannot be availed of in case where prosecution has been instituted or where tax arrears relate to undisclosed foreign income or assets.