Updated: March 14, 2020 8:18:03 am
The Parliament on Friday approved the Direct Tax Vivad Se Vishwas Bill which will provide an opportunity to taxpayers to end pending disputes by paying the tax amount, with interests and penalties waived off, till March 31.
The Bill was passed by voice vote in Rajya Sabha. It was approved by Lok Sabha on March 4.
Replying to the debate on the Bill in Upper House, Finance Minister Nirmala Sitharaman said the government is taking all steps towards addressing the issue of reduction of litigation on a priority basis. “We are bringing in faceless assessment. Not just faceless assessment, but the appeals would also now become faceless… the root cause of the litigation should be addressed. The government is taking all steps towards reducing the litigation. It is our priority,” she said.
Denying allegations that this is an “amnesty scheme”, she said, “This scheme is not an amnesty scheme at all. But the taxpayer has to pay a certain tax amount and that tax amount, the undisclosed cash deposit during demonetisation, is liable to be suffering a tax of 75 per cent. Hence, the taxpayer has to pay 75 per cent, the demonetisation related ones, of tax for settling the dispute regarding the cash deposits, which had been made during the period of demonetisation. So, it is not an amnesty for anybody.”
For those who have paid tax under protest, she clarified that “if the amount already paid by the taxpayer exceeds the amount payable by the taxpayer under this scheme, refund shall be granted to the taxpayers. Those who have paid with a protest, if the amount paid already is much higher than the tax which they have to duly pay, then you have this relief of the refund coming in.”
She said cases above Rs 5 crore have been excluded from the scheme so that large evasion-related cases and fraud cases do not come under its purview. Initiating the debate, Congress’s M V Rajeev Gowda targeted the government, saying it had given “tremendous discretion” to tax authorities “and that the use or misuse of their discretion is what is resulting in litigation”.
He called the Bill a “Band-Aid solution to a large problem that is festering” and said the Bill has significant flaws which demonstrate the “bankruptcy of the government’s approach to the economy”.
Arguing that the Bill was hastily brought about, he said the aim is to “plug the extraordinary fiscal deficit because the economy has been sinking and the government is not able to raise revenues in traditional ways”.
He argued that while the deadline for settling the disputes is just two weeks away, the Bill has yet to get the President’s assent and rules are to be framed.
“In such a situation, how do you expect people to be able to go out there and make a considered decision based on what has actually come out of Parliament?,” he said and asked the government to extend the cut-off date till June 30.
In her reply, Sitharaman said March 31 is the date given to pay dues without any additional penalty, whereas between March 31 and June 30, the dues can be paid with an additional penalty of 10 per cent.“However, what is important here is that the Bill authorises the government to notify the end date. So, depending on how this whole thing is going, based on the suggestions coming from the tax assesses themselves, the notification will be issued subsequently,” she said.
Some members, including P Wilson and Tiruchi Siva from the DMK, said the Bill’s title Vivad Se Vishwas is in Hindi and therefore in violation of the Constitution and will trigger implication in non-Hindi speaking states.
To, this, the Finance Minister gave an assurance that she will ensure through a circular that all regions use it with a local language and also advertise it in a local language, agreeing that the expression in Hindi may not be understood by many regional language-speaking assessees.
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