Are companies up for Vivad se Vishwas scheme?

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In order to resolve the direct tax disputes, FM Nirmala Sitharaman introduced the Vivad Se Vishwas Bill in Lok Sabha.

The scheme offers waiver of interest, penalty and prosecution in order to settle the tax disputes. For payments made upto March 31, the said scheme offers complete waiver of interest and penalty.

Sounds great, right? 

Well, not all the companies think so. Firstly, many companies are worried about the likely impact on Balance Sheet if this scheme is availed. They are afraid of Earning Per Share (EPS) getting hit if litigations are resolved through Vivad se Vishwas Scheme.

Secondly, many companies including the public sector units have cash flow related dilemma. Many companies are even required to take approval from their shareholders before going ahead with the aforementioned scheme.

While the government keeps nudging the companies to get away with litigations through this scheme, companies seem to be quite skeptical.

And of course some companies are also hoping to win the case. So why to pay the tax if there lies strong hope of getting away with it completely.

Vivad Se Vishwas has surely left the industry puzzled. Let’s wait and watch.

 

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