Taxes on equity, STT, CTT disputes held outside the scheme Vivad se Vishwas

NEW DELHI: Disputes related to wealth, securities transactions, taxes on commodity transactions and the equalization lien will not be covered by the 'Vivad Se Vishwas' amnesty scheme.

By issuing a detailed FAQ, the Income Tax department has clarified that the declarant must deposit the amount of the tax in dispute within 15 days after the determination of the tax liability by an authority designated under the scheme.

The Vivad Se Vishwas Direct Tax Bill was approved by Lok Sabha on Wednesday, paving the way for the government to notify the rules and procedures for the implementation of the scheme, which was proposed in the Budget.

Under the proposed scheme, taxpayers willing to resolve disputes will be allowed a full exemption from interest and fines if they pay the total amount of disputed taxes before March 31 of this year, after which an additional tax must be paid in dispute of 10 percent. beyond the tax obligation.

In addition, when the arrears are related only to interests or fines in dispute, then 25% of the fines or interests in dispute must be paid if the payment is made before March 31, beyond which it will be increased to 30 %.

The scheme would remain open until June 30, 2020.

Frequently asked questions clarified that in cases where the revenue department has filed an appeal, the declarant will have to pay 50 percent of the tax in dispute (62.5 percent in search cases) and/or 12.5 percent of the fine, interest or rate before March 31.

If the payment is made after that, the declarant must pay 55 percent of the tax in dispute (67.5 percent in search cases) and/or 15 percent of the fine, interest or rate in dispute.

To a question about whether security transaction tax (STT), commodity transaction tax (CTT) and equalization lien would be covered by the scheme, frequently asked questions said No. Only disputes related to the Income tax is covered.

Up to 4.83 lakh direct tax cases involving Rs 9.32 lakh crore in disputed taxes are enclosed in various appeal forums, such as commissioners (appeals), ITAT, debt recovery courts, higher courts and the Supreme Court.

This amount is equivalent to 82 percent of the government's direct tax revenue in fiscal year 19.

The plan would cover the pending appeals before the appeals forum [Commissioner (Appeals), Court of Income Tax Appeals (ITAT), superior court or Supreme Court], and pending petitions before the superior court or the Supreme Court or petitions of special license (SLP) pending before SC as of January 31, 2020.

The scheme can also be used in cases of search and seizure operations where the recovery is up to Rs 5 million rupees and also those that are pending arbitration.

The scheme will not cover pending disputes before the Early Decision Authority (AAR). However, if the AAR has determined the total income and the order has been challenged in a higher court, it would fall within the scope of the scheme.

Frequently asked questions also said that the scheme would also cover taxes deducted at source (TDS) and tax collection disputes at source (TCS) that are pending appeal. However, if there is no dispute related to TDS or TCS and there is a delay in the deposit of said TDS/TCS, then the pending dispute in appeal related to the interest collected due to such delay will be covered by Vivaad se Vishwas, he said.