New scheme to end I-T disputes won't attract Vodafone, Cairn: Experts

Topics Budget 2020

The finance minister announced a new scheme Vivad Se Vishwas in the Budget, to end all pending income tax (I-T) disputes. Tax experts, however, say this will not attract big cases such as Vodafone and Cairn Energy, given the government is seeking 100 per cent of the tax demand up-front by March. Nevertheless, the schemes has waived off penalty and interest. 

‘’We have to wait for details of the scheme, as only the announcement has been made. However, to expect 100 per cent of the tax demand to be paid, particularly in the context that many of these demands are highly controversial, does not appear practical and, as such, the scheme does not seem appealing,” said Ketan Dalal, managing partner of Katalyst Advisors. “Also, to expect taxpayers to avail of this scheme by March end, given the ongoing cash flow strain overall, seems impractical.”

Under the proposed scheme, a taxpayer would be required to pay the full tax amount by March 31, 2020. Those who avail of this scheme after March 31 will have to pay some additional amount. The scheme will remain open till June 30. The FM said any taxpayer, whose case appeals are pending at any level, could benefit from the scheme.

The FM added that in the past, the Modi-led government had taken several measures to reduce tax litigations and in the last Budget, the Sabka Vishwas scheme was brought in to reduce litigation in indirect taxes. This scheme resulted in the settling of over 189,000 cases.

At present, she said, there are 483,000 direct tax cases pending in various appellate forums i.e. Commissioner (Appeals), ITAT, High Court, and Supreme Court.

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