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Last Updated : Mar 26, 2020 09:49 AM IST | Source: Moneycontrol.com

Vivaad Se Vishwas: Deadline extension provides the much-needed breather to taxpayers

The government has even decided to waive the 10 per cent interest applicable

Khyati Dharamsi

Those roiling under the pressure of being unable to consult their Chartered Accountants and also liquidate investments due to the stock market mayhem after the COVID-19 outbreak heaved a sigh of relief with the extension of the Vivaad se Vishwas scheme.

The Finance Minister Nirmala Sitharaman on Tuesday extended the deadline for settling disputes under the VSV scheme to June 30, 2020 from the earlier deadline of March 31, 2020.

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Deadlines extended

The additional interest payment of 10 per cent wouldn’t be applicable for those who paid the disputed tax between March 31, 2020 and June 30, 2020. “The government considers the genuine hardship on the taxpayers by extending the dates and waiving off the 10 per cent payment on disputed tax till 30th June 2020 under the VSV scheme,” says Kapil Rana, chairman and founder, HostBooks Limited, which offers accounting software to chartered accountants.

The scheme, which was announced in the Union Budget 2020, had been aiming to garner Rs 9.32 lakh crore linked to 4.83 lakh direct tax cases that have been pending with the commissioner (Appeals), ITAT, high courts and the Supreme Court.

“If clients consult us and we need to suggest a strategy, then we wouldn’t be able to offer it off hand, as the related papers and data are left behind in the office. Most CAs wouldn’t have direct access to data of all clients, as the servers are placed in the office and backups aren’t available on the cloud. Hence, the extension offers relief in the current scenario,” says Raju Shah, chairman of the legal representation committee of the CA Association of Ahmedabad.

Another Chartered Accountant shared the information of a tax demand of 60 per cent that was made on a client whose major source of income is linked to the equities markets. “He had requested for additional time due to the grim situation of stock prices. Attachment of bank accounts and other assets had been triggered by the Income Tax Department,” the CA disclosed. Such cases would get a breather due to the extension.

Interest waiver

Chartered Accountants associations across the country – Bombay, Surat, Ahmedabad, Karnataka, and Lucknow – had jointly requested for an extension in the deadline for the cases covered under the VSV Scheme in the wake of the economic condition due to the outbreak of Coronavirus.

“We had merely asked for extension of time. But the government has even decided to waive the 10 per cent interest applicable in cases. There are lots of people that want to opt for scheme. We had been discussing everyday over phone calls. But now, most clients will wait till March 31, 2020 to make use of the scheme,” says Ameet Patel, Partner at Manohar Chowdhry & Associates Chartered Accountants.

The letter mentioned the difficulty in adhering to the scheme, which was approved on March 21, 2020 and the short timeline of 8-10 days available for those willing to take benefit of the scheme. “To avail the scheme under the payment of 100 per cent of ‘disputed tax,’option, taxpayers will have only 8 to 10 days to decide on making an application, getting the same processed from the Designated Authority (‘DA’) and making the payment before 31st March 2020,” the letter states.

After opting for the VSV scheme, the taxpayer submits the form. A certificate is issued by the Tax Department within 15 days, containing details of the amount of tax payable. The disputed tax amount needs to be paid within 15 days of receiving the certificate, which couldn’t have been possible before March 31, 2020 anyway.

Elaborating on why the extension was needed, Patel says, “The filing can’t be done when we are away from offices. The access to digital signatures and data is restricted, the client too is at home and has no access to documents and proofs. Also, payment of taxes above Rs 1 crore isn’t accepted through the NEFT channel. When there are tax payments to be paid for years together, the money is not lying around in liquid form. FDs need to be liquidated, stock prices are affected, mutual fund NAVs are impacted and business income has been affected. Hence an extension was the need of the hour.”

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First Published on Mar 26, 2020 09:49 am
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