We have launched our mobile app, get it now. Call : 9354229384, 9354252518, 9999830584.  

Tags Current Affairs

Vivad se Vishwas scheme

Date: 07 February 2020 Tags: Banking & Financial Sector

Issue

The government has introduced The Direct Tax Vivad se Vishwas Bill, 2020, which led to an uproar in Parliament.

 

Background

At present there are as many as 4,83,000 direct tax cases pending in various appellate forums. The idea behind the scheme is to reduce litigation in the direct tax arena.

 

Details

  • The Bill is aimed at resolving direct tax related disputes in a speedy manner.  In the last budget, Sabka Vishwas Scheme was brought in to reduce litigation in indirect taxes. It had resulted in settling over 1,89,000 cases.

  • Vivad se Vishwas Scheme, which is to do for direct tax related disputes exactly what Sabka Vishwas did for indirect tax related disputes.

  • Under the proposed Vivad Se Vishwas scheme, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays by 31st March, 2020.

  • Those who avail this scheme after 31st March, 2020 will have to pay some additional amount. However, the scheme will remain open only till June 30, 2020. The scheme also applies to all case appeals that are pending at any level.

Significance of scheme

Over Rs 9 lakh crore worth of direct tax disputes are pending in the courts. The government hopes to recover a big chunk of this in a swift and simple way, while offering the taxpayers the relief of not having to fight the case endlessly.

 

How did ‘Sabka Vishwas scheme’ perform?

  • The government expected to have raised Rs 39,500 crore from the Sabka Vishwas scheme, which was only about indirect tax disputes.

  • The amnesty window for Sabka Vishwas closed on January 15 and close to 1.90 lakh crore applications, in relation to taxes worth Rs 90,000 crore were received.

  • One of the standout successes of this scheme was Mondelez India Foods Pvt Ltd (which was earlier known as Cadbury India) settled one of its most controversial tax disputes with the government under this scheme.

  • The firm was accused of evading taxes to the tune of Rs 580 crore (excluding taxes and penalties). In the end, Mondelez paid Rs 439 crore on January 20 under the amnesty scheme.

Notice (8): Undefined variable: quizpole [ROOT/plugins/Studyiq/src/Template/Pages/tagdetails.ctp, line 161]