“State-run firms are not finding the scheme lucrative enough to settle disputes because they believe their cases have merit and require a legal recourse. They say if they settle the matter, there will be an impression of poor governance and flaws on their part,” said an official informally briefed by one of the firms he approached.
Some big cases the tax department wants to settle under the scheme include those of Life Insurance Corporation
and Air India, and various companies state governments run.
Sources said the Income-Tax Department
had identified at least 50 central and state PSUs, of which it approached at least 30 to come under the settlement scheme.
These state-run firms are in legacy tax rows involving about Rs 1 trillion, according to sources in the know. Experts, however, say egging on PSUs to avail of the scheme would be successful because their owner is the government, to which they will go if they avail of the scheme.
Besides, the CBDT, which is monitoring each bit of the scheme, is learnt to be facing refusal in 20 per cent of the cases of eligible entities, which say the scheme is “not beneficial for them” and in some cases they have no money to pay, said another source in the tax department.
However, the department has deployed all its resources to ensure that each eligible case comes under the scheme.
Meanwhile, Revenue Secretary Ajay Bhushan Pandey
is holding a meeting with income-tax officials on March 9 to discuss the top 100 eligible cases concerning entities that have agreed to come under the scheme, along with the feedback from large taxpayers
who had been approached by tax sleuths so far.
“We have to prepare information for the review meeting called by the revenue secretary. These include a list of Central and state PSUs; updated list of the oversight committee (an internal panel supervising the scheme) report; status of top 50 advance tax cases with chief commissioners and the expected amount of tax collection in the fourth quarter ending on March 31,” said a tax official.
Sources say the CBDT
is seeking daily report on the tax resolution scheme which includes value involved in consented cases, taxpayers
who refuses to avail the scheme and the value involved in such cases; number of taxpayers
undecided and along with figure of taxpayers who has been contacted and responded so far.
The scheme aims to provide for resolution of disputed direct tax cases, announced in the Budget on February 1. This immunity scheme provides taxpayers an option to settle cases pending before all the judicial forums as on January 31.