- Bill was introduced in the Parliament on 5th Feb, 2020.
- No Dispute but Trust Scheme – “Vivad se Vishwas Scheme”.
- To settle pending disputes relating to direct taxes.
**Purpose of the Scheme**
The main purpose of the scheme is to :
- Reduce pending litigation
- Generate revenues for the Govt.
- Get relief from pending dispute by paying disputed tax and get waiver from payment of interest and penalty and also get immunity from prosecution.
It is an attempt to release 9.32 trillion (as on 30th Nov 2019) blocked in approximately 483000 appeals pending at various appellate forums.
**Eligibility of Scheme**
- Orders for which time limit for filing appeal has not expired on 31st Jan 2020.
- Cases pending before Dispute Resolution Panel (DRP) or the cases where DRP has issued direction on or before 31 Jan 2020 but Order has not yet been passed.
- Cases where assesse has filed revision application u/s 264 on or before 31st Jan 2020.
- Dispute where payment has already been made shall also be eligible.
The tax payer can enter into scheme where there is disputed tax/ TDS/TCS. In case there is no disputed tax taxpayer can opt for the scheme for pending appeals relating to disputed penalty, interest and fees.
Where pending dispute relates to reduction of Loss, Depreciation and MAT Credit, the tax payer has option –
(a) Pay tax on reduced amount.
(b) Not to carry forward the said amount.
If there is any rectification pending in relation to disputed tax, the tax shall be calculated after giving effect to rectification order passed, if any.
- Disputed Tax = Tax+ Surcharge + Cess against which appeal is pending.
- Tax Arrears = Disputed Tax+ Penalty+ Interest (Charged or Chargeable).
**If payment is made on or before 31st Dec 2020 : **
Disputed Tax - 100%. In Search Case-125%
Disputed Penalty, Interest & Fees - 25%
If payment is made after 31st Dec 2020 :
Additional 10% - If additional 10% exceeds interest and penalty, excess shall be ignored.
Additional 5% - If additional 5% exceeds interest and penalty, excess shall be ignored
If case is filed by income tax department-50% of above rates.
In case the issue is decided in favor of tax payer by higher appellate forum-50% of above rates.
If due to lack of jurisdiction, ITAT has quashed Astt Order and dept is in appeal with HC and there is no disputed tax because there is no asstt Order- Enter into Scheme and pay 50% of disputed tax that would be restored if the dept was to win the appeal in HC.
- If excess payment is made before filing the declaration, refund shall be issued without interest.
- If tax is paid after availing benefit of Scheme and later tax payer decides to take refund of tax, refund will not be granted.