CAG flags delays and errors in India's Direct Tax Vivad se Vishwas Scheme

The Comptroller and Auditor General of India (CAG) has reported significant administrative failures in the implementation of the Direct Tax Vivad se Vishwas (DTVsV) Scheme, 2020. An audit report presented to Parliament revealed delays in issuing necessary forms, with some instances extending up to 1,398 days.

The audit, which covered 5,212 cases across 24 states, found that 63 per cent of sampled cases experienced delays in issuing Form-3 beyond the prescribed 15-day period. Additionally, 45 per cent of cases involving Form-5 saw delays of up to 954 days. The report also highlighted issues regarding incorrect tax calculations, rejected eligible applications, and revenue losses.

The DTVsV Scheme was originally designed to reduce pending income tax litigation and provide taxpayers with certainty and immunity from penalties. As of early 2020, disputed direct tax arrears were estimated at Rs 10.09 lakh crore across 4.15 lakh appeal cases.