The Finance Ministry on Wednesday (February 5) introduced a new bill in the Lok Sabha which seeks to resolve disputed tax cases involving ₹9.32 lakh crore.
The Direct Tax Vivad Se Vishwas Bill, 2020, was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. Introducing the Bill today, she said the it seeks to provide a formula-based solution without any discrimination.
Giving the rationale behind the scheme, Sitharaman said it will reduce the litigation expenditure for the government and at the same may help in generating some revenue.
If the scheme achieves to collect direct tax dues, it will bring relief to the Narendra Modi government, which has estimated fiscal deficit for this year at 3.8% of GDP. A similar scheme called ‘Indirect Tax, Sabka Vishwas‘,announced last year aimed to settle indirect tax disputes related to central excise duty, service tax and various cesses had collected more than ₹39,000 crore.
Opposing the introduction of the bill, Congress leader Adhir Ranjan Chowdhury said the Bill will hurt the government’s tax collection. Senior Congress leader Shashi Tharoor too criticised the Bill saying the Direct Tax Vivad Se Vishwas Bill, 2020, violates principle of equality by equally treating honest and dishonest tax payers.
Vivas se Vishwas Bill, 2020
The scheme offers a complete waiver on interest and penalty to the taxpayers who pay their pending taxes by March 31. It also aims to benefit those whose tax demands are locked in dispute in multiple forums.
If a taxpayer fails to pay the dues by then, the deadline will be extended till June 30th. However, in that case, the taxpayer would have to pay 10 per cent more on the tax.
(With inputs from agencies)