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Wednesday, June 03, 2020

Vivad se Vishwas: Rules & forms notified; e-facility to avail scheme

After March 31, an additional 10 per cent of disputed tax will have to be paid over and above the tax liability. However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered.

By: ENS Economic Bureau | New Delhi | Updated: March 20, 2020 5:16:14 am
vivad se vishwas bill, tax bill, union budget vivad se vishwas bill,, budget 2020, direct tax, direct tax litigation, indian express Under the scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year. (File)

Notifying the rules and forms for the direct tax dispute resolution scheme Vivad se Vishwas, the Income Tax Department on Thursday also launched an electronic facility for taxpayers willing to avail the scheme.

Under the scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year.

After March 31, an additional 10 per cent of disputed tax will have to be paid over and above the tax liability. However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered. The scheme would remain open till June 30.

“To prepare and submit the #VSVS Form:Please go to e-Filing portal: incometaxindiaefiling.gov.in ->Login using PAN (or TAN as applicable) & password ->Select ‘Vivad se Vishwas’ Tab ->Select ‘Prepare and Submit DTVSV Forms’,” the Department posted on its official Twitter handle.

The government had earlier notified the rules and five online forms to be filled by taxpayers for availing the Vivad Se Vishwas scheme. “The declaration in Form 1, the undertaking in Form 2 and intimation of details of payment in Form-4 are to be verified by digital signature or Electronic Verification Code (EVC) as applicable for the filing of ITR,” the Department said.

Tax experts said that with the COVID-19 outbreak and companies opting for work from home, notification of rules and forms merely 10 working days before the initial deadline will make it tough for taxpayers willing to opt for the scheme and that an extension should be considered.

“The scheme, open till June 30, imposes additional burden of tax in case payment of disputed tax is made after 31st March 2020. The government has notified the forms and rules merely 10 days before the due date, if taxpayers want to obtain maximum benefits to the taxpayers desirous of availing the scheme. Therefore, practically, it may be extremely difficult both for the taxpayers as well as designated authorities to examine all the cases and make payment on/before 31st March 2020,” Rakesh Nangia, chairman, Nangia Andersen Consulting said.

“Further, the turmoil due to the global pandemic makes matters worse as various offices and tax practitioners have started working from home. The scheme designed to provide relief to taxpayers stuck in long drawn litigation becomes less attractive and practically very difficult to implement owing to the stringent deadlines, which must be extended by the government,” he added.

PwC India partner and leader—corporate and international tax, Frank D’Souza said, “Given that settlement under VsV (Vivad se Vishwas) would mean no further recourse available, no taxpayer would want to leave any issue open, technically or otherwise, in the process. Some of the aspects like whether the scheme amounts to conceding the position by the taxpayer, which were not part of the legislation and later clarified by way of FAQs, have now been clarified as a part of the rules and the forms. Given the limited time available to avail of the benefits of the March 31, 2020 deadline, it remains to be seen if the date would get extended beyond March 31.”

The Revenue Department notified five forms for various steps under the scheme, which are required to be filled online. Eligible assessees are required to submit their declaration in Form 1 to the designated authority, which is a very detailed form covering different scenarios.

Further, an undertaking waiving the right to seek or pursue any remedy or any claim in relation to tax arrears under any law shall have to be furnished by the declarant in Form 2.

The declaration form (Form 1) seeks detailed information relating to the nature of tax arrears, assessment year, details of order, amount of tax arrears already paid, etc.

On receipt of the declaration form and undertaking, the designated authority shall, within 15 days, issue an order (in Form 3) directing the assessees to make payment of sum payable after adjusting the amounts already paid.

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