Significant Highlights of The Direct Tax Vivad Se Vishwas Bill, 2020

In order to reduce litigation in indirect taxes, the government had in 2019 brought in the “Sabka Vishwas (Legacy Dispute Resolution) Scheme”, which received a good response. This scheme for settlement of indirect tax litigation had resulted in settling over 1,89,000 cases.

The Finance Minister of India, Smt. Nirmala Sitharaman in her Budget Speech on 1 February 2020 proposed to introduce a new scheme to reduce litigation in direct tax matters which is expected to result in settling appeals pending at various appellate levels. Pursuant to the Budget Speech, a bill was introduced in the Parliament on 5 February 2020 named “The Direct Tax Vivad se Vishwas Bill, 2020 (“the Scheme” or “the Bill”)” for dispute resolution related to direct taxes.

Under the proposed bill, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays the required amount by 31st March 2020. Those who avail this scheme after 31st March 2020 will have to pay some additional amount.  

Any person who has tax arrears due to disputed tax, interest, penalty or fee and has filed appeal before the appellate forum (Commissioner (Appeals) (‘CIT(A)’) or Income Tax Appellate Tribunal (‘ITAT’) or High Court (‘HC’) or Supreme Court (‘SC’)), where such appeal is pending on 31 January 2020 can apply under this Scheme by way of filing a declaration.

The Finance Minister Nirmala Sitharaman in her budget speech said that the scheme would remain open till June 30, 2020. Notably, the time limit for filing an application under the Scheme with the authority is yet to be prescribed by the Central Government.

We are pleased to enclose the newsflash, wherein more details of the scheme are elucidated for your reference purposes.

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