Union Finance Minister Nirmala Sitharaman on Friday indicated at extension of the Vivad se Vishwas scheme for direct tax dispute resolution, saying the end date would be notified later based on suggestions from assesses and studying the impact of implementation.
March 31 is the last date for tax payment without 10 per cent additional payment. “...the Bill authorises the government to notify the end date. Based on how this whole thing is going and suggestions from assesses themselves, the notification will be issued subsequently,” Sitharaman said. She was responding to a question in the Rajya Sabha that the Scheme provides too short a time for assesses to participate.
The Rajya Sabha later passed the Bill, which will now require President Ram Nath Kovind’s assent before it is notified. This leaves assessees barely a fortnight to take part in the process if they want to avail of full benefit of the scheme.
Addressing criticism pertaining to tough target of 100 per cent cases for field officers, Sitharaman said the target was more for the outreach activity and not to get every assesse on board.
“Of course we want officials to take every scheme of the government seriously, but not to the extent of compelling every assesse to come for the scheme,” the finance minister said, adding the outreach programme was about the scheme and why assesses should come on board.
She also clarified that search and seizure cases of over Rs 5 crore have been excluded as the government doesn’t want large fraud and evasion cases to come under the scheme. There are more than 400,000 such cases eligible to avail of the scheme, and they involve at least Rs 9.3 trillion.
Gouri Puri, partner at Shardul Amarchand Mangaldas & Co, said the government had addressed several concerns surrounding the scheme. “The rules on set off of loss against amounts payable under the scheme are still awaited. Given that March 31 is around the corner, an extension would have been helpful,” said Puri.
Sitharaman said the government was also addressing the root cause of tax disputes by reducing the discretion of tax officers and physical interface between tax officers and tax payers. She said the government had planned to reduce litigation using technology for faceless assessment as well as for faceless appeals.
Rohinton Sidhwa, partner at Deloitte India, said time was exceedingly short for tax payers to take advantage of the scheme prior to March 31. “The forms to avail of the scheme are required to be filed with the designated authorities, who have 15 days to decide the amount due. After that the assessee should get another 15 days to pay taxes and withdraw appeals. However, due to the delay in approving the scheme by Parliament, taxpayers will have to move very quickly,” said Sidhwa.
The designated authority will determine the amount payable within 15 days of receiving the declaration and grant a certificate of amount to be paid. The declarant will have to deposit the money within 15 days of the determination of the tax liability.
The clarification gives little time to assessees to square up by March 31 because the Bill is yet to be enacted.
The Central Board of Direct Taxes had, however, clarified in the FAQs issued on Thursday that “15 days is (the) outer limit”. A clarification said designated authorities would be instructed to grant a certificate at an early date enabling the appellant to pay the amount on or before March 31, so that the entity could take the benefit of reduced payment.
Disputes relating to wealth tax, securities transaction tax, commodity transaction tax, and equalisation levy are not covered under the scheme.