After a tepid response to its Budget announcement of Direct Tax Dispute Resolution Scheme, 2016, the government on Friday extended the deadline for the scheme by one month till January 31 for companies to settle disputes through the one-time window.
“In view of the representations received from various stakeholders and for the convenience of the taxpayers, the last date for availing the Direct Tax Dispute Resolution Scheme, 2016 (the Scheme) has been extended up to January 31, 2017,” the Central Board of Direct Taxes (CBDT) said in a release.
Watch What Else Is making News
In Budget for 2016-17, the government had announced Direct Tax Dispute Resolution Scheme, a scheme to settle the retrospective tax disputes by waiving interest and penalty if the companies agreed to pay the principal amount of the tax demand.
The government had notified the scheme on May 26, following which the scheme opened on June 1 and was due to close on December 31.
“In the said notification, the figures, letters and words December 31, 2016, the figures, letters and words January 31, 2017, shall be substituted,” CBDT said in a notification.
Through the scheme, the government hopes to settle major retrospective tax cases with Vodafone Group and Cairn Energy of UK. Not just the disputes in retrospective taxes, the government also seeks to end nearly 2.6 lakh pending tax cases where about Rs 5.16 lakh crore is locked in.
The response to the scheme has not been good so far with none of the companies facing the retrospective tax cases having come forward even one day before the end of the scheme.
For disputes other than the retrospective tax cases, taxpayers, whose appeal is pending as on February 29, 2016 before the CIT (Appeals), can settle cases by paying the disputed tax and interest up to the date of assessment. For a disputed tax amount of up to Rs 10 lakh, the penalty will be forgone. In cases where the disputed amount is above Rs 10 lakh, a minimum penalty of 25 per cent will be levied. For penalty appeals, the scheme allows the assessee to pay minimum penalty of 25 per cent.
The tax department had last week come out with the second FAQ clarifying taxes cannot be paid in installments. It also said that the scheme provided for waiver of the interest and penalty for retrospective tax cases only if the firm in question withdraws all appeals against the government at all judicial forums and does not contest the Constitutional validity of retrospective amendments in high court or Supreme Court .
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines