MEMBER OF PARLIAMENT, RAJYA SABHA
National Spokesperson and Head of IT Cell, BJD
The Direct Tax Vivad Se Viswas Bill, 2020
DR. AMAR PATNAIK (ODISHA): Sir, when I used to be with the CAG, we used to write in our audit reports regularly. We used to write about litigation and resolution of disputes. So, in that context, when I have seen this regularly being written and no action, no real effort being made to resolve these tax disputes, this is really a welcome move. This Bill looks at two aspects of appeals, that is, those filed by tax payers as well as filed by the IT Department. So, I really welcome this development. I only have certain caveats to say that whether the timeline is too stiff because within that particular time the taxpayer has to take care of whether the provision is beneficial to him. And, then after that, getting that money to deposit it and getting a certificate that will take time. So, probably the timeframe is too stiff. The second point is in a tax dispute, there are several issues which are mentioned. Now, the provision says that all the issues have to be settled for the case to be closed and not just separate issues. Now that would probably create a problem for the income tax authorities as well as the taxpayer because the taxpayer might feel that in certain cases, he is on a very strong ground. The operationalization of the second aspect, which is the tax authorities filing appeals, now, I don't understand as to why the taxpayer will now pay 50 per cent because he has already won against the Appellate Tribunal and feels that he is on a very strong ground. So, why would he really give 50 per cent and not wait for the Court Order to come? These could be operational issues. The third point is, the Income Tax Department officials now, as the Circular says, have been given the 100 per cent target to trace them. Now that within the timeframe may be very difficult and may result in things which are unintended. There is another aspect that is relating to the provision of immunity to appellant and revival of disputes. The Bill says that the declaration filed by an appellant will become invalid if its particulars are found to be false. But, at the same time, if he has already got a certificate, he is covered under immunity and when subsequently, the falsity or the truthfulness of a declaration is revealed, I really don't understand as to how both the things will operate at the same time. Is there a timeframe for that? The other aspect is relating to transfer pricing. In this Bill, there is a provision window to the declarant to settle the transfer pricing disputes under the scheme, but it has kept the secondary adjustment provisions intact, which basically means that you have to get the money to India, repatriate funds to India, even if you go for settlement under the scheme. Is that the intention? The other point is that the amended scheme has provided options to the taxpayer either to pay notional tax on the disputed amount and take the benefit or accept the reduced losses and pay nothing, after accepting the additions and settle the penalty. Maybe, you know, those companies who are planning to close, shut their businesses and resort to this! But, I would like to know whether the big companies who are spending big amounts will take advantage of this. I said that this is a brilliant piece of legislation. But I would like to know whether the big companies, within this particular short time frame, since they have the financial muscle, to go to the court and get a favourable decree, will be taking advantage of this particular Scheme. We must remember that only 10 per cent was collected in the indirect taxes regime, when a similar scheme was introduced. Here, there has been a much more liberal scheme. But, still, I am afraid that the operationalisation will probably result not into a happier situation for the Government. I support the Bill. But, these are the concerns that are expressed. Thank you so much.