With a steep revenue collection target for the fiscal year, the government is examining ways to make the scheme attractive for assesses. Vivad se Vishwas scheme was announced in the Budget presented on February 1 and allows waiver of interest, penalty, and prosecution for settling
due up to January 31, 2020.
“Ways are being examined to ensure that the scheme remains relevant for businesses to participate as they are hit by cash crunch and stalling of economic activity. Allowing payment in three instalments through the current fiscal year till March 31, or even staggering it further to some part of next fiscal looks ideal. It will give businesses enough time to overcome the current cash crunch,” said a government official.
Another official added that amending the Act to allow staggered payments will encourage more people to participate in the scheme and help government revenues.
Several companies and firms are re-evaluating their stance on participation in the scheme, which was earlier ending on March 31, without an extra 10 per cent payment.
The government had, in 2016, come out with an Income Declaration Scheme, for undeclared income. This allowed taxes to be paid in three instalments – November 30, March 31 and September 30 in the following year.
With revenue collections under pressure, the government was hoping to garner at least Rs 2 trillion from the scheme. Sandeep Jhunjhunwala, director, Nangia Andersen, said, “Amid the global pandemic, when cash flows are really challenged, the introduction of instalment facility would enable companies in deploying available cash to kickstart the core business functions.”
Amit Maheshwari, tax partner at AKM Global, a consulting firm, said, “If the government allows taxes to be paid in instalments, it would give an incentive to more people to come forward and apply for the scheme. For those who have already applied, it would ease cash flows.”