‘Vivad se Vishwas only for income tax, not wealth tax’

NEW DELHI: The government has clarified that the ‘No Dispute but Trust’ or ‘Vivad Se Vishwas’ Scheme covers only income tax and does not include disputes related to wealth tax, security transaction tax (STT), commodity transaction tax and equalisation levy.

In a circular, the Tax department has said that the scheme covers disputes related to tax deducted at source (TDS) and tax collection at source (TCS) which are disputed and pending in appeal.

“However, if there is no dispute related to TDS or TCS and there is a delay in depositing such TDS/TCS, then the dispute pending in appeal related to interest levied due to such delay will be covered under Vivad se Vishwas,” the circular providing clarification on numerous issues said.

The circular is quite exhaustive given that it has covered as many as 55 queries related to the direct tax amnesty scheme.

Announced in the budget by Finance Minister Nirmala Sitharaman, the Vivad se Vishwas scheme is aimed at reducing income tax litigation, generate timely revenue for the government and benefit taxpayers by providing them peace of mind and certainty.

It also seeks to provide savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process.

Gokul Chaudhri, Partner, Deloitte India said that the prompt advisory from the Ministry of Finance would provide guidance to the taxpayers.

“The priority placed by the government to address and resolve the tax litigation build-up is important. Efficient implementation could help establish trust based relationship between the tax department and the taxpayers,” he said.

Amit Singhania, Partner, Shardul Amarchand Mangaldas & Co said that clarifications on Vivad se Vishwas Scheme provided by the circular is quite exhaustive and virtually provides clarification on all accounts.

“This should provide certainty in the minds of the taxpayers who are evaluating the Scheme. The aspect of applicability of secondary adjustment in case of transfer pricing disputes post AY 2016-17 overshadow the benefits expected out the Scheme,” said Singhania.

There are nearly 4,83,000 direct tax cases pending in various appellate forums such as Commissioner (Appeals), ITAT, High Court and Supreme Court. In these disputes, Rs 9.5 lakh crore remains locked.

Under the proposed amnesty 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 the amount by 31st March, 2020.

The Lok Sabha on Wednesday passed the Vivad Se Vishwas bill paving the way for the government to mop up much-needed revenue.

Also Read: Lok Sabha passes direct tax scheme Vivad se Vishwas Bill

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