Article explains who can be Beneficiary of Vivad Se Vishwas Scheme, Vivad Se Vishwas Scheme Mechanism, Quantum Of Amount Payable Under Vivad Se Vishwas Scheme:–A) If The Declarant Is Assessee/ Taxpayer And Appeal Was Also Filed By Assessee or B) If The Declarant Is Department And The Department Has Filed Appeal And Lost On An Issue, Provision Of Refund under Vivad Se Vishwas Scheme, Reservations and Validity Of Vivad Se Vishwas Scheme.
On 1st February 2020, Ms. Nirmala Sitharaman tried to impress the Tax Payer community by introducing the mechanism to clear the cache pendency of appeals filed by assesses at various appellate levels i.e. CIT (A), ITAT, High Courts, Supreme Courts.
Further Amended the scheme would also covers the some cases of DRP and cases where disputed demand is upto 5 Cr.
It is stated that as on 30th November 2019 Rs.9.32 lakh Cr (Nearly 4.83 lakhs cases) were stuck as disputed direct taxes arrear which constitute nearly one year Direct tax collection.
Hence to speed up the immediate tax collection and to save the copious time taken to address those pending appeals as on 31st January 2020, Finance Minister proposed this Scheme called VIVAD SE VISHWAS SCHEME 2020.
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Beneficiary of Vivad Se Vishwas Scheme
This scheme covers any assesse, who not later than as on 31.01.2020 is aggrieved by any order which falls within time limit to file appeal or of any appeal is filed the same stands pending before CIT(Appeals), ITAT, High Courts, Supreme Courts, Cases pending before DRP (Dispute Resolution Panel) or the cases where DRP issued directions but not the final Order upto 31.01.2020.
Any revision petition filed u/s 264 on or before 31st Jan 2020 has also been taken into this scheme’s purview. Search cases where disputed demand is less than Rs 5 Cr. has also been included to lure the taxpayers and release the burden from the judiciary. (Note:- The limit of 5 Cr. will be computed year wise)
Now the scheme extends the benefits to departments as well hence department can also file declaration where department lost an issue
The pending appeal may be against assessment order or reassessment orders whether related to Disputed income or disputed tax along with disputed Penalty/ Fees/ Interest or Orders against matter related to Tax deduction at source.
In this scheme, certain orders are not covered i.e. where demand arises due to non-disclosure of income from a source outside India or from undisclosed assets placed outside India, where order of detention is made under Foreign Exchange and Prevention of Smuggling Activities Act 1974, where assessment or reassessment proceedings are pending against tax arrears related transfer pricing related matters, where disputed demand in search-related matters is more than 5 Cr. or when prosecution initiated under income tax Act or IPC.
Vivad Se Vishwas Scheme Mechanism
The simple procedure is provided to avail benefit under the scheme:
STEP 1:- Appellant has to file a declaration as prescribed to the designated authority.
STEP 2:-The designated authority shall determine the amount payable by the declarant within 15 days of declaration and Grant a Certificate showing tax or amount to be paid and the manner in which it has to be paid. Apart from the payment, the declarant has to provide proof of withdrawal of the appeal.
STEP 3:- Once certificate mentioning amount payable is issued to the declarant, the declarant within 15 days from the receipt of Certificate will have to pay the same & intimate the details of payment along with proof of withdrawal of appeal/writ to get final order conclusive against which no matter covered therein will ever be opened or investigated for persuasion (This way immunity is given to Appellant).
Quantum Of Amount Payable Under Vivad Se Vishwas Scheme:–
A) If The Declarant Is Assessee/ Taxpayer And Appeal Was Also Filed By Assessee:-
| NATURE OF TAX ARREARS | AMOUNT PAYABLE UPTO 31ST MARCH 2020 | AMOUNT PAYABLE UPTO 30TH JUNE 2020 |
| I. Where tax arrears is the AGGREGATE amount of disputed tax/ Interest or penalty whether charged or chargeable. | Amount of Disputed Tax only. | The aggregate amount of disputed tax (+) 10% of the disputed tax subject to a maximum of interest or penalty charged or chargeable on such tax paid (excess shall be ignored). |
| II. Where Tax arrears is ONLY related to disputed Interest and penalty/fees | 25% of disputed Interest/ penalty/ fees. | 30% of disputed Interest/ penalty/ fees. |
| III. where the matter is related to Search and disputed demand is up to 5 Cr. | 125% of the disputed tax, interest and penalty would be completely waived. | 135% of the disputed tax, interest and penalty would be waived. |
B) If The Declarant Is Department And The Department Has Filed Appeal And Lost On An Issue:-
| NATURE OF TAX ARREARS | AMOUNT PAYABLE UPTO 31ST MARCH 2020 | AMOUNT PAYABLE UPTO 30TH JUNE 2020 |
| I. In the matter of search cases | 62.50 % of disputed tax. Interest and penalty would be waived. | 67.50% of the disputed tax. Interest and penalty would be waived. |
| II. Matters other than search cases | 50% of the disputed tax. Interest and penalty would be waived. | 55% of the disputed tax. Interest and penalty would be waived. |
| III. Where the dispute relates to ONLY Interest penalty or levy | 12.5% of the disputed interest, penalty or levy. | 15% of the disputed Interest, penalty or fees/levy. |
Provision Of Refund under Vivad Se Vishwas Scheme
If the assessee before filing declaration has paid some amount before appellate authorities and such amount exceeds the amount payable under the scheme then he would be allowed refund of such amount.
Reservations:-
√ If there is more than one issue involved in the appeal and assessee wish to avail the benefits of the scheme then he has to file declaration covering all issues, meaning thereby he cannot file declaration for some issues and litigate the balance in appeal.
√ In a case where an assessee has got a favorable decision on an issue at the higher forum, he would be required to pay only 50% of the disputed tax on that issue.
Validity Of Vivad Se Vishwas Scheme
The last date of filing a declaration under the scheme is 30th June 2020.
This article intends to educate stakeholders. The author of this article is a practicing Chartered Accountant, feel free to write or contact in case of any query: CA. Shaleen Jain ([email protected])
Author Bio
Declaration format to avail vivad se visvas scheme2020 of I T department is not available in the website
Will the declarant get the benefit or credit of the 20% of disputed tax, deposited for filing the appeal, in calculating the amount of tax to be deposited to avail the benefits of the scheme?
Nicely explained. Suppose , in tax arrears case, the balance represents tax& interst on admitted income as well as disputed tax and interst thereon..Whether the declarant is absolved of all dues, if tax on disputed tax is paid? He has paid 20% of tax arrears. Can he take credit of the same?