The Central Board of Direct Taxes (CBDT) has settled tax disputes in more than 133,000 pleas made under the Vivad Se Vishwas scheme, fetching ₹54,005 crore to the exchequer, chairman P. C. Mody said on Tuesday. This is more than a fourth of the 510,000 disputes that existed on 31 January 2020. If appeals by the tax department and the taxpayer over the same taxation issue is considered, the total disputes that have been successfully concluded, based on the 133,000 pleas received, touched 148,690 or more than 29% of the total disputes, according to data shared by the CBDT.
Speaking in an interview, Mody said giving relief to so many taxpayers, including companies, state-owned enterprises and individuals, in a single scheme was a major achievement for the CBDT.
“The scheme has achieved its purpose. It has helped in settling disputes, which was the focus area, more than the collection of revenue,” said Mody. Reducing tax litigation has been a priority for Prime Minister Narendra Modi.
The CBDT has in the past few years raised the monetary threshold for filing appeals at all forums starting from appellate tribunals to the Supreme Court to reduce cases getting escalated. It has also withdrawn several appeals from courts.
Among the cases settled under the Vivad Se Vishwas scheme, 2,255 cases belong to central and state government-owned firms and of government agencies incorporated as boards. These accounted for receipts of ₹28,738 crore to the exchequer on settlement, a little more than half of the ₹54,005 crore received by the government under the scheme.
The total disputed tax covered by all the resolved cases is more than ₹1 trillion. The scheme required payments of only the principal amounts and waiver on interest and penalties. Private sector companies and individuals accounted for the remainder of the 133,000 pleas received,but the receipts to the exchequer on resolution of these cases is a notch below that of state-run companies at ₹25,267 crore, according to CBDT data.
Mody said opting for the scheme was the choice of the individual taxpayer. “This was a one-time scheme. Whoever wanted to take benefit of it has taken. Considering the outcome of past schemes, this has been quite a remarkable success,” the CBDT chief said.
However, one big challenge for the government is to deal with the remaining cases, a large number of which are of private sector companies and individuals and cumulatively account for a high amount of tax demand. In these 360,000 remaining cases involving a tax claim of ₹18.5 trillion, the normal administrative and judicial process will continue.
To a question on whether tax recovery will take place in those cases where the law permits, Mody said, “If recovery has to take place, it has to.”
The CBDT chairman said that the tax authority will proceed as per law in these cases.