Govt mulling fresh dispute resolution schemes

Subject : Government schemes

Government is currently assessing the possibility of introducing yet another set of one-time tax dispute resolution scheme for both direct and indirect taxes to reduce litigation and unlock funds.
The dea is based on the past success of dispute resolutions schemes which were announced earlier in previous budgets – for indirect tax cases, Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) was introduced in 2019 and the revenue collected under the scheme was around Rs 38000 crore.
Similarly, noting the success of SVLDRS, for direct taxes, Vivad se Vishwas Scheme was announced in 2020 and the revenue collected under this scheme was around Rs 54000 crores.

Vivad Se Vishwas Scheme:

The scheme provides for settlement of disputed tax, disputed interest, disputed penalty or disputed fees in relation to an assessment or reassessment order on payment of 100% of the disputed tax and 25% of the disputed penalty or interest or fee.
The Direct Tax Vivad se Vishwas Act, 2020 was enacted in March 2020 to settle direct tax disputes locked up in various appellate forums.
As many as 1.25 lakh cases, a quarter of all direct disputes, have opted for Vivad se Vishwas scheme, enabling settlement of Rs. 97,000 crore in tax demands.

Sabka Vishwas Legacy Dispute Resolution Scheme

Sabka Vishwas is a legacy dispute resolution scheme notified by Government for closing pending disputes relating to legacy Service Tax and Central Excise cases. It is to be operationalized from 1st September 2019.
The two main components of the Scheme are dispute resolution and amnesty.
The dispute resolution component is aimed at liquidating the legacy cases of Central Excise and Service Tax that are subsumed in GST and are pending in litigation at various forums.
The amnesty component of the Scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any other consequences under the law.
The most attractive aspect of the Scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine, penalty.
In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.
The objective of the Scheme is to free the large number of small taxpayers of their pending disputes with the tax administration.