The tax dispute with Cairn Energy Plc cannot be brought under the Vivad se Viswas scheme, a senior Income Tax Department official has clarified.
“The scheme is closed now. Whosoever wanted to avail himeself of the scheme, has done so,” Pramod Chandra Mody, Chairman, Central Board of Direct Taxes (CBDT), told
The last date to make a declaration under the scheme was March 31, while payment of disputed tax without any additional amount (as prescribed under the scheme) can be made till April 30. The Department has received over ₹54,000 crore under the scheme as payment against disputed tax.
Arbitration award
In December, Cairn had won an arbitration award for $1.2 billion (excluding interest and other expenses) against India. Two months after that, its Chief Executive Officer Simon Thomson came to India and met then Finance Secretary Ajay B Pandey. Post that meeting there was speculation that the matter might be settled via the Vivad se Viswas Scheme.
Under the scheme, if an issue has already been decided in favour of the assessee and the Department has gone in appeal, the disputed amount payable gets reduced by 50 per cent. The government has already filed an appeal against the award.
Talking about overall performance of the scheme, Mody said that one of the reasons for the success of the scheme is trust factor. “We have tried to bridge the trust deficit between the Department and tax payers. If taxpayer has taken one step, the department has taken two steps. It is very-very good beginning. With more and more of taxpayers’ services, I think it should be a good start to voluntary compliant behaviour,” he said.
The scheme, was part of Budget 2020-21, and was implemented through an act. It was brought to provide mechanism for resolution of pending tax disputes.
The scheme covered appeals filed by taxpayers or the government, which are pending with the Commissioner (Appeals), Income tax Appellate Tribunal, High Court or Supreme Court as on January 31 2020, irrespective of whether demand in such cases is pending or has been paid.
When asked about apprehensions among certain taxpayers for disputes in other matter post the scheme as the tax department has much more information, Mody categorically denied that. “That fear is misplaced. How it is possible? On the one hand we are trying to close a dispute, settle the dispute, so how can on the other hand, we will reopen any case?,” he asked while making it clear that the scheme says categorically, if the dispute once settled is settled.