Wealth tax, STT, CTT disputes kept out of Vivad Se Vishwas amnesty scheme; govt issues detailed FAQ

New Delhi: Disputes relating to wealth, securities transaction, commodity transaction taxes and equalisation levy will not be covered under ‘Vivad Se Vishwas’ amnesty scheme. Issuing a detailed FAQ, the Income Tax department has clarified that the declarant has to deposit the disputed tax amount within 15 days after determination of the tax liability by a designated authority under the scheme. The Direct Tax Vivad Se Vishwas Bill was passed by the Lok Sabha on Wednesday, paving the way for the government to notify rules and procedures for implementation of the scheme, which was proposed in the Budget. Under the proposed scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by 31 March this year, following which a 10 percent additional disputed tax will have to be paid over and above the tax liability. [caption id=“attachment_6221211” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Further, where arrears are related to disputed interest or penalty only, then 25 percent of disputed penalty or interest will have to be paid if the payment is made by 31 March, beyond which the same will be enhanced to 30 percent. The scheme would remain open till 30 June, 2020. The FAQ clarified that in cases where the revenue department has gone in for appeal, the declarant will have to pay 50 percent of the disputed tax (62.5 percent in search cases) and/or 12.5 percent of the disputed penalty, interest or fee by 31 March. If payment is made after that, the declarant will have to pay 55 percent of the disputed tax (67.5 percent in search cases) and/or 15 percent of the disputed penalty, interest or fee. To a question whether wealth tax, security transaction tax (STT), commodity transaction tax (CTT) and equalisation levy would be covered under the scheme, the FAQ said “No. Only disputes relating to income-tax are covered”. As many as 4.83 lakh direct tax cases involving Rs 9.32 lakh crore in disputed taxes are locked in various appellate forums such as Commissioner (Appeals), ITAT, debt recovery tribunals, high courts, and the Supreme Court. This amount is the equivalent of 82 percent of the government’s direct tax revenue in FY'19. The scheme would cover appeals pending before the appellate forum [Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), High Court or Supreme Court], and writ petitions pending before High Court or Supreme Court or special leave petitions (SLPs) pending before SC as on the 31 January, 2020. The scheme can also be availed in cases of search and seizure operations where the recovery is up to Rs 5 crore and also those which are pending arbitration. The scheme will not cover disputes pending before the Authority of Advance Ruling (AAR). However, if the AAR has determined the total income and the order has been challenged in High Court, it would come under the ambit of the scheme. The FAQ further said the scheme would also cover tax deducted at source (TDS) and tax collection at source (TCS) disputes which are pending in appeal. “However, if there is no dispute related to TDS or TCS and there is delay in depositing such TDS/TCS, then the dispute pending in appeal related to interest levied due to such delay will be covered under Vivaad se Vishwas,” it said.