Cash Bonanza: Govt gets over Rs 72,000 crore under Vivad se Vishwas scheme

Income Tax Department’s direct tax dispute resolution Vivad se Vishwas scheme has so far bagged Rs 72,480 crore, an amount that is nearly 11% of the total estimated corporate tax collection in the current financial year much to the relief of cash strapped Union Government. According to finance ministry sources, taxpayers have so far filed a total 45,855 declarations in the Form 1 till November 17, 2020. These declarations covered a disputed amount of Rs 31,734 crore, reports ETV Bharat's Deputy News Editor Krishnanand Tripathi.

New Delhi: In a major relief for the cash strapped Union government, Income Tax Department’s direct tax dispute resolution Vivad se Vishwas scheme has so far bagged Rs 72,480 crore, an amount that is nearly 11% of the total estimated corporate tax collection in the current financial year, ETV Bharat has learnt. According to the budget estimates, the Centre is expected to get Rs 6.91 lakh crore from corporation tax in the current fiscal.

It has come as a big relief for Prime Minister Narendra Modi’s government, which as been facing the double whammy as the Covid-19 global pandemic severely dented its revenue collection, both direct and indirect taxes, at a time when it is required to spend more on relief measures and on economic stimulus to turn around the economy.

According to finance ministry sources, taxpayers have so far filed a total 45,855 declarations in the Form 1 till November 17, 2020. These declarations covered a disputed amount of Rs 31,734 crore, said a source in the ministry of finance.

However, the big relief has come from the settlement of tax disputes by the central PSUs as they settled a total disputed amount of little over Rs 1 lakh crore under the scheme.

“So far, CPSUs and taxpayers have paid a cumulative amount of Rs 72,480 crore against the disputed demand under the scheme till date,” a source told ETV Bharat.

Regular monitoring, digital awareness campaign

According to finance ministry sources, the income tax department adopted a proactive approach, which included regular monitoring of issue of the Form-3 to those taxpayers who had filed declarations under the scheme and a quick rectification and finalization of the demand. The department also launched a digital awareness campaign to sensitize the taxpayers about various provisions of the scheme.

“Consequent to declaration under the scheme and on fulfillment of conditions, all appeals are withdrawn, both by taxpayers and by the department,” said a source.

Vivad se Vishwas extended till the year end

Finance minister Nirmala Sitharaman has announced the scheme in this year’s budget and necessary changes were made in the income tax act for its roll out. Initially, the government had set a deadline of March 31 this year, which was extended as Prime Minister Narendra Modi announced a complete nationwide lockdown from March 25 to slow down the community spread of the virus in the country.

The highly infectious virus has killed over 1,30,000 people in the country and over 13,47,000 lakh people worldwide since it was discovered in China on November 18 last year.

The Covid-19 global pandemic is expected to cause a loss of $9 trillion to the world economy while the country’s economy is projected to contract by nearly 10%, a contraction of around Rs 20 lakh crore.

Last month, the government extended the deadline for making the declaration under the scheme to December 31, 2020 and the deadline for making payment without any additional component such as interest and penalty was extended to March 2021.

What is Vivad se Vishwas scheme?

In March this year, the Modi government launched the Vivad se Vishwas Scheme to reduce the burden of litigation related to direct taxes. The scheme was officially launched on March 17 after the Parliament made approved the necessary amendments in the income tax act.

The Vivad se Vishwas scheme provides for settlement of direct tax disputes, including disputes arising out of tax demand, interest and penalty among other things, in relation to an assessment or reassessment order. It requires payment of 100% of the disputed tax and 25% of the disputed penalty or interest or fee.

Subject to declaration under the scheme, a taxpayer is granted immunity from levy of interest, penalty and prosecution for any offence under the Income-tax Act in respect of matters covered under the declaration made by him.

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