The Direct Tax Vivad Se Vishwas Bill Tabled in Parliament

Over the years, the pendency of appeals filed by taxpayers as well as Government has
increased due to the fact that the number of appeals that are filed is much higher than the number of appeals that are disposed. As a result, a huge amount of disputed tax arrears is locked-up in these appeals. As on the 30th November, 2019, the amount of disputed direct tax arrears is Rs. 9.32 lakh crores. Considering that the actual direct tax collection in the financial year 2018-19 was Rs.11.37 lakh crores, the disputed tax arrears constitute nearly one year direct tax collection.

2. Tax disputes consume copious amount of time, energy and resources both on the
part of the Government as well as taxpayers. Moreover, they also deprive the Government of the timely collection of revenue. Therefore, there is an urgent need to provide for resolution of pending tax disputes. This will not only benefit the Government by generating timely revenue but also the taxpayers who will be able to deploy the time, energy and resources saved by opting for such dispute resolution towards their business activities.

3. It is, therefore, proposed to introduce The Direct Tax Vivad se Vishwas Bill, 2020 for
dispute resolution related to direct taxes, which, inter alia, provides for the following,
namely:—

(a) The provisions of the Bill shall be 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 the 31st day of January, 2020
irrespective of whether demand in such cases is pending or has been paid;

(b) the pending appeal may be against disputed tax, interest or penalty in relation
to an assessment or reassessment order or against disputed interest, disputed fees
where there is no disputed tax. Further, the appeal may also be against the tax determined on defaults in respect of tax deducted at source or tax collected at source;

(c) in appeals related to disputed tax, the declarant shall only pay the whole of
the disputed tax if the payment is made before the 31st day of March, 2020 and for the
payments made after the 31st day of March, 2020 but on or before the date notified by
Central Government, the amount payable shall be increased by 10 per cent. of disputed
tax;

(d) in appeals related to disputed penalty, disputed interest or disputed fee, the
amount payable by the declarant shall be 25 per cent. of the disputed penalty, disputed
interest or disputed fee, as the case may be, if the payment is made on or before the
31st day of March, 2020. If payment is made after the 31st day of March, 2020 but on or
before the date notified by Central Government, the amount payable shall be increased
to 30 per cent. of the disputed penalty, disputed interest or disputed fee, as the case
may be.

4. The proposed Bill shall come into force on the date it receives the assent of the
President and declaration may be made thereafter up to the date to be notified by the
Government.

To download the bill click here

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