Representation for extension of time-line of 31st December 2020 for filing of Declarations under The Direct-tax Vivad Se Vishwas Act, 2020

We are of the view that the Direct-tax Vivad Se Vishwas Act, 2020 (‘VSV Scheme’) is an extremely thoughtful scheme and goes a long way in demonstrating Government’s sincere intent to reduce pending litigation and to promote a non-adversarial tax regime under its motto of easing of doing business.

However sufficient time needs to be given to taxpayer to understand and take benefit of the scheme.

For the reasons set out below, we earnestly request for extension of time-line of 31st December 2020 for filing declaration under the scheme to 31st March 2021 to enable taxpayers to take full benefit of this exemplary scheme :

1. As your Honour is aware the debilitating situation faced by tax payers on account of Covid-19 Pandemic still continues in large part. Metro cities like Mumbai, Delhi, Bangalore etc – where a majority of the large taxpayers like MNCs are situated – still are facing the brunt of the impact and do not have offices functioning to full capacity. Further, taxpayers all over India are presently focussed on resuming their business operations to the fullest extent and hence, have not been able to look into the VSV Scheme and understand its intricacies to the full extent possible.

2. Too many deadlines are there for taxpayers to comply by 31st December 2020 like finalising of accounts for year ending March 2020 for corporate tax payers, filing of Returns for non-corporate taxpayers and completion of Tax Audits and Transfer Pricing Audits being also 31 December 2020, therefore all the taxpayers and consultants are busy with the same and have not been able to able to study and digest the nuances of the Scheme and Clarifications issues there under to the fullest.

3. Though further clarifications have been issued on 4th December 2020, there are various positions that need to be clarified.

4. Further, several associations have made representations with Finance Ministry and CBDT. Also, there were many issues raised during ICAI conference on Direct Tax -Vivad Se Vishwas Bill, 2020 on 16th March, 2020 attended by Hon’ble Ma’am along with Shri Piyush Goyal (Hon’ble Minister of Commerce & Industry), during which your Honours had ensured that necessary clarifications will be issued to make VSV Scheme a success. Also, Shri Piyush Goyal had addressed several conferences and had given assurance that issues under the VSV Scheme shall be clarified.

5. It is to be noted that the Clarifications issued by CBDT vide circulars dated 22nd April 2020 and 4th December 2020 still leave several issues open, which is one of the reasons why large taxpayers like MNCs are not in a position to settle issues under VSV Scheme.

6. Clarifications on VSV Scheme were issued only on 4 December. Hence, it would be very difficult for large taxpayers like MNCs having multiple years and multiple issues under litigation, to understand and digest them and take a call on how to opt for VSV scheme.

7. Also, as your Honours are aware that many large MNCs having headquarters in US, UK, Germany etc are operating in India. The Headquarters of these MNCs are severely impacted by the COVID pandemic and also, the headquarters will be shut on account of Christmas Holidays from next week onwards, hence, getting directions from Headquarters has been even more difficult.

On account of above-mentioned issues, several large taxpayers including MNCs, whose huge tax amounts have been locked in litigations, have not been able to come forward to settle dispute under VSV Scheme.

For all these reasons we request Hon’ble Ma’am to take decision and make announcement for extension of timeline to file declaration under the VSV Scheme at the earliest. We also request Hon’ble Ma’am to inform the CBDT officials and CCIT’s across locations to resolve taxpayers’ grievances on timely basis, so that taxpayers have full clarity for coming forward to settle disputes under the VSV Scheme.

We trust that the issues highlighted above would draw your kind attention and necessary measures would be taken at the earliest to make VSV Scheme a grand and deserving success by extending the deadline for filing of declarations under the VSV Act to 31st March 2021.