The two tax dispute settlement schemes brought by the Finance Ministry to bring a quick resolution to long-pending disputes have so far brought in about Rs 1.11 lakh crore in the government's kitty in the form of resolution, Moneycontrol has learnt.
Sabka Vishwas Scheme, a dispute resolution-cum-amnesty scheme for settling pending disputes of service tax and central excise, is believed to have raked in Rs 39,500 crore. The remaining 72,000 crore has come from the Vivad se Vishwas scheme that allows businesses to settle direct tax disputes and which is still ongoing. Vivad Se Vishwas scheme allows for settling of the disputed dues at concessional terms and avoid prosecution. The window for Sabka Vishwas closed on January 15.
"The public-sector disputes alone are over Rs 1 lakh crore. The pandemic happened and the dates got extended," a senior government official said.
The scheme was launched in March this year but due to the pandemic, the due date for filing requests has been extended till the end of December and companies have time till the end of March 2021 to make the payment without additional charges.
The scheme allows for settling disputes by paying the principal in full without interest and penalty. Where the dispute is regarding interest and penalty, settlement can happen by paying one-fourth of the disputed amount.
As many as 4.83 lakh direct tax cases involving Rs 9.32 lakh crore in disputed taxes are locked in various appellate forums.
The Central Board of Indirect Taxes and Customs (CBIC) closed the Sabka Vishwas (Legacy Dispute Resolution) Scheme with duty payable being Rs 39,591.91 crore ( Rs 24,770.61 crore pre-deposit and Rs 14,821.30 crore freshly payable).
"More than 1,50,000 applications, involving a total duty of about Rs 89,000 crore, were filed," the official said.
Finance Minister Nirmala Sitharaman had unveiled the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, in the Budget 2019-20 with the objective of settling pending disputes of service tax and central excise.
The Sabka Vishwas Scheme, which became operational on September 1, 2019, provided a one-time window to eligible persons to declare their tax dues and pay the same in accordance with the provisions. The relief was to be provided to the tune of 70 percent of the duty involved if it is Rs 50 lakh or less, and 50 percent if it is more than Rs 50 lakh.
Last month, finance minister Nirmala Sitharaman had indicated that a real-time mechanism to resolve tax disputes will be in place soon. She also expressed concern over the delay in finalising the Advance Pricing Agreement (APA).
“I understand we need to have a robust mechanism by which disputes can be resolved. There should be simultaneous tracking of disputes and, if possible, prevent them from becoming disputes or, if they are indeed disputes, settle them at the earliest through real-time kind of mechanism,” Sitharaman had said.
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