CBDT extends deadline of Direct Tax Dispute Resolution Scheme
The scheme was announced in the 2016-17 Budget Speech and came into force on 1 June 2016 with an aim to release about Rs 5.16 lakh crore.
The Central Board of Direct Taxes (CBDT) on 30 December 2016 extended the deadline for availing the Direct Tax Dispute Resolution Scheme from 31 December 2016 to 31 January 2017.
The deadline was extended with an aim to give companies one more month to accept its offer to settle retro tax disputes with the Union Government.
About Direct Tax Dispute Resolution Scheme
• The scheme was announced by the Union Finance Minister Arun Jaitley in the 2016-17 Budget.
• It came into force on 1 June 2016 with an aim to release about Rs 5.16 lakh crore, the amount that is locked in about 2.6 lakh pending direct tax cases.
• It provides for waiving interest and penalties if the principal amount involved in retrospective tax cases is paid
• Under it, a disputed tax amount of up to Rs 10 lakh and the penalty can be forgiven.
• In cases where the disputed tax amount is above Rs 10 lakh, those cases will be levied with a penalty of 25 percent.
• It waives off the interest and penalty for retrospective tax cases only if the company in question withdraws all appeals against the government at all judicial forums.
• For disputes other than the retrospective tax cases, taxpayers, whose appeal is pending as on 29 February 2016, can settle cases by paying the disputed tax and interest up to the date of assessment.
• A firm, availing the scheme, will be required to pay the principal tax amount within 30 days to the designated authority.
• Through this scheme, the Union Government looks forward to settle major retrospective tax cases facing Vodafone Group and Cairn Energy of UK.
The extension of the deadline comes against the backdrop of tepid response from companies towards the scheme.