Companies Weigh Cash Flow Impact of India’s Tax Settlement Offer

March 5, 2020, 9:44 PM

Companies hoping to settle tax disputes with the Indian government could face cash flow problems if they opt into a proposed new settlement program that would require their outstanding tax bills to be paid by March 31.

The Vivad Se Vishwas plan—legislation announced on Feb. 1 and yet to be ratified by Parliament—would save companies interest and penalties they might otherwise have to pay. But the settlement deadline leaves companies little time to come up with the cash to cover 100% of the original tax demand while also meeting end-of-year tax obligations.

“One big challenge for large taxpayers is ...

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