Govt notifies rules, forms for Vivad Se Vishwas scheme

The government has notified the rules and online forms to be filled by taxpayers for availing the direct tax dispute resolution scheme 'Vivad Se Vishwas'.

Under the proposed scheme, taxpayers willing to settle disputes will be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute by March 31 this year.

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After March 31, an additional 10 per cent of disputed tax will have to be paid over and above the tax liability. However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered.

The scheme would remain open till June 30.

The Revenue Department notified five forms for various steps under the scheme, which are required to be filled online.

The eligible assessees are required to submit their declaration in Form 1 to the designated authority, which is a very detailed form covering different scenarios.

Further, an undertaking waiving the right to seek or pursue any remedy or any claim in relation to tax arrears under any law shall have to be furnished by the declarant in Form 2.

The declaration form (Form 1) seeks detailed information relating to the nature of tax arrears, assessment year, details of order, amount of tax arrears already paid, etc.

Further, the form provides the manner of computation of 'tax payable' under the scheme in different scenarios (i.E. For declarations relating to disputed tax/ TDS/TCS/ disputed interest/ disputed penalty or fee).

On receipt of the declaration form and undertaking, the designated authority shall, within 15 days, issue an order (in Form 3) directing the assessees to make payment of sum payable after adjusting the amounts already paid.

The assessee has also been given a 30-day period (as per Form 3) for payment of the prescribed sum and give intimation of such payment to the designated authority. The intimation of payment is required to be made in Form 4, specifying the details of payment like the serial number of challan, date of payment and amount.

In case of non-payment of the amount determined within the prescribed time period, the declaration shall be treated as void and shall be deemed to have never been made.

Finally, the designated authority shall issue a certificate (in Form 5) granting immunity and specifying the details of dispute settlement.

Meanwhile, Nangia Andersen Consulting Chairman Rakesh Nangia said the forms and rules have been notified merely 10 days before the due date, if taxpayers want to obtain maximum benefits under the scheme. Additionally, all the forms are required to be filled online and utility/ e-forms are yet to be released, which may take another 1-2 days.

So practically, taxpayers may have only around 7-9 working days to avail the scheme on/before March 31, 2020, he said.

"Therefore, practically, it may be extremely difficult both for the taxpayers as well as designated authorities to examine all the cases and make payment on/ before 31st March 2020," Nangia said. Further, the turmoil due to the coronavirus pandemic makes matters worse as various offices and tax practitioners have started working from home.

"The scheme designed to provide relief to taxpayers stuck in long drawn litigation becomes less attractive and practically very difficult to implement owing to the stringent deadlines, which must be extended by the government," Nangia added.