New Delhi, May 31 (IANS) The Direct Tax Dispute Resolution Scheme for resolving cases including those on retrospective taxation, and equalisation levy on cross border digital transactions, will come into effect from Wednesday, an official statement said.
“The Direct Tax Dispute Resolution Scheme, and provisions relating to imposition and collection of equalisation levy, incorporated in the Finance Act 2016, shall come into force on the June 1, 2016,” the finance ministry said in a statement on Tuesday.
The scheme can be helpful to companies like Vodafone and Cairn, who are embroiled in retrospective taxation cases. Through this, the companies will have the opportunity of settling the cases by paying only the tax arrears while the interest and penalty will be waived off.
In his budget speech, Finance Minister Jaitley had said “to give an opportunity to the past cases which are ongoing under the retrospective amendment”, he proposed a one-time scheme of dispute resolution, in which, subject to their agreeing to withdraw any pending case lying in any court or tribunal or any proceeding for arbitration, mediation etc. under the Bilateral Investment Promotion and Protection Agreements), they could settle the case by paying only the tax arrears and the interest and penalty would be waived.
The declarations under this scheme may be made on or before December 31, 2016, in respect of tax arrears and specified tax, the statement said.
For equalisation levy, the rules for specified services were notified earlier on May 27, it said.