Giving companies like Vodafone and Cairn Energy one more month to accept its offer to settle retro tax disputes, the Central Board of Direct Taxes has extended its one-time tax dispute resolution scheme till 31 January.
The Direct Tax Dispute Resolution Scheme, announced by Finance Minister Arun Jaitley in the budget for 2016-17, seeks not only to settle disputes in retrospective taxes, but also end nearly 2.6 lakh pending tax cases, where Rs 5.16 lakh crore are locked in.
On 26 May, the government had notified the scheme saying it would open on 1 June and close on 31 December.
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 29 February 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 foregone. In cases where the disputed tax amount is above Rs 10 lakh, a penalty of 25 percent will be levied.
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.
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)
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