The Lok Sabha on Wednesday passed the Direct Tax ‘Vivad Se Vishwas’ Bill, 2020 which will provide for dispute resolution related to direct taxes.
The bill was passed amid din in the House over the opposition’s demand for an immediate discussion on Delhi violence.
The clause-by-clause consideration of the bill was taken up on Tuesday amid ruckus in the House over the opposition’s demand. However, the bill was not passed as the Lower House was adjourned due to the unruly behaviour of the members.
Meenakshi Lekhi, who was in the Chair, took up the remaining clauses of the bill when the House assembled at 2 pm following adjournments earlier in the day.
The bill was passed by a voice vote despite sloganeering from the opposition MPs.
The bill is applicable to appeals filed by taxpayers or the government, which are pending with the Commissioner (Appeals), Income-tax Appellate Tribunal, High Court or Supreme Court as on January 31, 2020, irrespective of whether demand in such cases is pending or has been paid.
What is The Direct Tax Vivad se Vishwas Bill, 2020?
The Bill is aimed at resolving direct tax-related disputes quickly which can benefit both the taxpayer and the government.
“In the past, our government has taken several measures to reduce tax litigations. In the last budget, Sabka Vishwas Scheme was brought in to reduce litigation in indirect taxes. It resulted in settling over 1,89,000 cases,” Finance Minister Nirmala Sitharaman had said in her Budget speech. She then unveiled the ‘Vivad se Vishwas Scheme’, which was to do for direct tax-related disputes.
According to the FM, currently there are as many as “4,83,000 direct tax cases pending in various appellate forums i.e. Commissioner (Appeals), ITAT, High Court and Supreme Court”. The idea behind the scheme is to reduce litigation in direct taxes.
What’s in the scheme?
Under the proposed ‘Vivad Se Vishwas’ 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 by March 31, 2020. Those who avail this scheme after March 31, 2020 will have to pay some additional amount.
However, the scheme will remain open only till June 30, 2020. The scheme also applies to all case appeals that are pending at any level.
How would it help?
As per reports, over Rs 9 lakh crore worth of direct tax disputes are pending in the courts. The government can recover it in a swift and simple manner, while also offering the taxpayers the relief of a speedy process.