In the Union Budget 2023, the Financial Minister Nirmala Sitharaman proposed to introduce a voluntary settlement scheme on the contractual disputes under Vivad Se Vishwas. It is another dispute settlement scheme.
In accordance with the budget speech, a voluntary settlement plan with uniform terms will be implemented to resolve contractual disputes involving the government and government undertakings in which an arbitral ruling is being contested in court. This will be accomplished by offering graded settlement terms based on the dispute’s state of pending litigation.
To lessen the amount of ongoing court issues involving direct taxation, FM Nirmala Sitharaman launched the “No Dispute but Trust Scheme” or “Vivad se Vishwas Scheme” in the Union Budget 2020.
The programme offers a once-in-a-lifetime chance to resolve direct tax litigation cases that are now before the courts without having to pay any interest or penalties.
By paying 100% of the contested tax and 25% of the disputed penalty, interest, or charge, the Vivad Se Vishwas programme allows for the settlement of disputed tax, disputed interests, disputed penalty, or disputed fees in respect to an assessment or reassessment order.
The purpose of the scheme is to reduce the pending litigation and the union budget 2023 proposed another way of settlement of the contractual disputes under the scheme by Voluntary Settlement Scheme.
According to the minister, the system will have standardised words, and the disputants will act appropriately. Even though the arbitral award between the Government and the Government undertakings is still pending before the court, there is still a chance to resolve the conflict immediately and willingly. The Central government sought to reduce the number of court cases still pending.
The Vivad se Vishwas scheme is that you only have to pay the tax that is in question while receiving relief from penalties. The Scheme is hence convenient for taxpayers who do not want to go to court or when the amount of tax involved is considerably smaller than the amount of tax interest and penalty.
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