The Union Budget 2023 announced a “voluntary settlement scheme with standardised terms” to amicably end commercial/contractual disputes concerning government undertakings in which arbitral awards are
Why in News:
- The budget 2023-24 has proposed a scheme for settling contractual dispute named Vivad se Vishwas II (Settling Contractual Disputes).
About Voluntary settlement scheme:
- It is introduced to settle contractual disputes of government and government undertakings; wherein arbitral award is under challenge in a court.
- This will be done by offering graded settlement terms depending on pendency level of the dispute.
- Under the scheme, voluntary option is given to the private sector to come into the scheme or not.
Vivad Se Vishwas Scheme:
- It is a direct tax scheme introduced by the Government of India in 2020for settling disputes between taxpayers and the income tax department.
- It aims to minimize tax-related litigation.
- Under this scheme, an individual taxpayer can claim full waiver on interest and penalty on the full and final settlement of the disputed tax amount.
- There was a time limit set for the payment of taxes under the scheme.
Q1) What is a contractual dispute?
A contractual dispute is a disagreement between parties to a contract about the performance, terms, or implementation of that contract.