New Delhi: As Finance Minister Nirmala Sitharaman is all set to present the Union Budget on February 1, experts have urged the government to introduce permanent dispute resolution process on the lines of Vivad se Vishwas Scheme.
Many taxpayers have availed the benefit of Vivad se Vishwas Scheme to put an end to ongoing litigation. The ongoing global COVID-19 outbreak has forced the Government to extend the period of scheme.
The scheme ‘Vivad Se Vishwas’ is a voluntary scheme for resolving pending direct tax disputes amicably with the taxpayers and no targets were fixed by the Government under the Scheme. The ‘Vivad se Vishwas’ Scheme was announced during the Union Budget, 2020, to provide for dispute resolution in respect of pending income tax litigation.
“Considering the fact that a lot of revenue is locked in litigation and prolonged time involved in settling the litigation, Government may consider a new mechanism to introduce a permanent dispute resolution process to enable negotiated settlement of disputes on a case-by-case basis,” Rajeev Dimri, National Head of Tax – KPMG in India said.
Amidst the concerns over COVID wave, the upcoming budget would be the most challenging budget. Every country is constrained to tap its revenue to fund its need to overcome the global COVID-19 outbreak, believes Dimri.
“Government would also be looking for avenues to expand its horizon of sources of taxation. However, as global consensus on Pillar 1 framework has now been achieved and several countries including India has committed on withdrawal of unilateral measures like Equalization Levy (‘EL’). One of the expectations from the budget in order to settle the dust surrounding EL provisions would be an early withdrawal of EL provisions which would help avoid prolonged litigation due to interpretational issues,” he added further.
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