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Photo: Reuters
Photo: Reuters

Big taxpayers shy away from settling pending disputes

  • Large taxpayers who are 12.5% of the total eligible taxpayers under the scheme are yet to make up their minds
  • 87.5% out of the total 184,000 eligible taxpayers have so far availed of the scheme

Large taxpayers are shying away from the government’s Sabka Vishwas legacy dispute resolution scheme, while 87.5% of the smaller eligible taxpayers have so far availed of the scheme.

The scheme, introduced by finance minister Nirmala Sitharaman in the 2019-20 budget to settle pending disputes of service tax and central excise duty, was extended last month till 15 January.

Large taxpayers, who are almost 12.5% of the total eligible taxpayers under this scheme, are yet to make up their minds to avail of the benefits, as the scheme comes to a close next week.

A finance ministry official speaking on condition of anonymity said that 161,214 taxpayers (87.5%) out of the total 184,000 eligible taxpayers have so far availed of the scheme. “These taxpayers have declared tax dues of around 79,968 crore and after availing the various reliefs and amnesty as per the rules of the scheme, they would pay around 35,094 crore. However, only 23,000 (about 12.5% of the total) eligible taxpayers have not yet applied under the Scheme," he added.

The large taxpayers are involved in tax litigation in 7,100 cases worth 1.7 lakh crore.

The official said the large taxpayers have not yet opted for the scheme probably because of the vast array of intermediaries including tax consultants and lawyers involved in the litigation. “For obvious reasons, the immediate settlement of these long pending cases is not seen in the best interests of these intermediaries. Even if a taxpayer is advised that its case is legally strong, economic prudence would justify it in availing the scheme," he added.

The official said that Central Board of Indirect Taxes and Customs officers are pursuing large taxpayers to avail of this scheme before 15 January as it would not be extend further.

“They are explaining the ‘never before, never again’ offer and benefits of the scheme to the remaining taxpayers and following them to apply as under the provisions of the scheme, its availment is not an admission that the declared tax liability was evaded or not paid in the first instance," he added.

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