The Central Board of Direct Taxes (CBDT) has extended the deadline for the tax settlement scheme to settle retrospective tax disputes till January 31.
The Direct Tax Dispute Resolution Scheme, announced by Finance Minister Arun Jaitley in the budget for 2016-17, seeks not just to settle disputes in retrospective taxes, but end nearly 2.6 lakh pending tax cases where Rs 5.16 lakh crore are locked in.
The offer to settle the disputes was to end on December 31, but it has now been extended till January 31, said the Central Board of Direct Taxes (CBDT).
On May 26, the government had notified the scheme saying it would open on June 1 and close on December 31.
"In the said notification, the figures, letters and words December 31, 2016, the figures, letters and words January 31, 2017, shall be substituted," CBDT said in a notification.
The scheme provides for waiving interest and penalties if the principal amount involved in retrospective tax cases is paid.
For disputes other than the retrospective tax cases, taxpayers, whose appeal is pending as on February 29, 2016 before the CIT (Appeals), can settle cases by paying the disputed tax and interest up to the date of assessment.
For a disputed tax amount of up to Rs 10 lakh, the penalty will be forgone. In cases where the disputed tax amount is above Rs 10 lakh, a penalty of 25 per cent will be levied.
For penalty appeals, the scheme allows the assessee to pay only 25 per cent of the penalty.
Through the scheme, the government hopes to settle major retrospective tax cases facing Vodafone Group and Cairn Energy of UK. It also expects a third of the other tax disputes to be settled.
The notification comes against the backdrop of tepid response from companies to the scheme. So far, none of the companies facing the retrospective tax cases have come forward.
The scheme provided for waiver of the interest and penalty for retro tax cases only if the company in question withdraws all appeals against the government at all judicial forums.
The tax department had last week come out with the second FAQ on the scheme clarifying that the taxes cannot be paid in instalments.
It had also said companies like Vodafone and Cairn Energy facing retrospective tax demand will have to withdraw legal cases and give up the right to contest constitutional validity of back-dated amendment to I-T laws if they want to avail of the dispute resolution scheme.
"It is, hence, clear that if the assessee avails (of) the scheme, he cannot contest the constitutional validity of retrospective amendment in the high court or the Supreme Court," the CBDT's Frequently Asked Questions (FAQs) said.
A firm availing of the scheme will have to pay the principal tax amount within 30 days to the designated authority determining the amount payable by the declarant.
(With inputs from PTI)
Latest Business News
