Cabinet Approves Changes In ‘Vivad Se Vishwas’ Bill For Faster Resolution In Direct Tax Litigations

The tax dispute resolution mechanism will now include litigations pending in debt recovery tribunal and other such forums as well as arbitration.

The Union cabinet on Wednesday approved to expand scope of the ‘Vivad Se Vishwas’ bill that aims to resolve cases involving more than Rs 9 lakh crore in direct taxes. The scheme will also include search and seizure cases where recovery is below Rs 5 crore, Prakash Javadekar, information and broadcasting minister, said in a press conference after the cabinet meeting. The move may help the government resolve cases pending after it invalidated Rs 500 and Rs 1,000 currency notes.

Javadekar also reiterated the government’s appeal to taxpayers to settle their disputes under the mechanism by March 31, 2020.

In her budget speech on Feb. 1, Finance Minister Sitharaman had announced that the Vivad Se Vishwas scheme would resolve 483,000 direct tax disputes pending in various tribunals. Taxpayers whose tax demands are locked in dispute in multiple forums can pay due taxes by March 31, 2020 and get complete waiver of interest and penalty, she had said. The bill was introduced in Lok Sabha on Feb. 9.

“This is an important development and may go a long way to reduce the total number of outstanding tax litigation disputes,” said SR Patnaik, Head -Taxation, Cyril Amarchand Mangaldas. “It’s also expected that the government may relook at the scheme and try to further expand the scope because many deserving cases are not getting included in the scheme.”

Amit Maheshwari, managing partner at Ashok Maheshwary & Associates LLP, too, said including smaller value search cases was a welcome step and would help taxpayers settle their dispute, especially when their case is weak. “This would unlock stuck up tax revenues and would help in reducing pending litigations.”