The Income Tax Department has just announced that entities participating in the 'Vivad Se Vishwas' direct tax dispute resolution scheme can make revisions to their declarations until they receive a certificate from tax authorities outlining their tax arrears and owed amounts.

The Vivad Se Vishwas scheme stands as a remarkable solution for resolving pending disputes, offering a unique opportunity to settle matters amicably. This scheme primarily addresses disputes of a monetary nature, excluding those related to specific performance of contracts. Here are everthuing you need to know about Vivad Se Vishwas scheme, exploring its applicability, eligibility criteria, and the process involved.

Applicability: The Vivad Se Vishwas scheme is designed to encompass contractual disputes, particularly those where one of the parties involved is either a government entity or an organization. The scheme extends its reach to the following categories:

Autonomous bodies under the government's purview.
Public sector banks and financial institutions.
Central Public Sector Enterprises (CPSEs).
Union Territories (UTs) without a legislature and associated agencies.

Organizations in which the government holds 50 percent or more shares, subject to approval by the Board of Directors.
Settlement Amount:

The amount payable under the Vivad Se Vishwas scheme is contingent upon the status of the dispute and is calculated as follows:

For awards passed before April 30, 2023: Contractors are required to pay 85 percent of the net amount or the amount lodged, whichever is lower.

For awards passed before January 1, 2023: The settlement amount is reduced to 65 percent of the net amount awarded or the amount lodged, whichever is lower.

Submission of Claims and Timeframe:
Contractors seeking resolution through the Vivad Se Vishwas scheme must submit their claims through designated platforms, such as the Government e-Marketplace (GeM) or IREPS portals. These claims should include detailed information regarding the dispute and the claim amount. Once the settlement is accepted under the scheme, it becomes the responsibility of the procuring entity to promptly release the deposited amount.

In the event of a challenge to an arbitral award, the procuring entity is obligated to pay 75 percent of the award amount to the contractor. This payment is made in exchange for a bank guarantee, which will be adjusted to account for any amounts due under the Vivad Se Vishwas scheme.

Revision of Declarations:
In a recent development, the Income Tax Department has announced that entities filing declarations under the Vivad Se Vishwas scheme can revise them until the tax authorities issue a certificate detailing tax arrears and the amount owed. This provision allows for greater flexibility and ensures that participants can make necessary adjustments during the resolution process.

The Vivad Se Vishwas scheme serves as a vital tool for resolving pending disputes efficiently, particularly in cases involving government entities and organizations. By offering clear guidelines on settlement amounts and providing a platform for revising declarations, this scheme aims to promote a fair and expeditious resolution of tax-related disputes. Understanding its nuances is crucial for those seeking to navigate the complex landscape of tax disputes in India.

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