The government’s decision to hike the monetary threshold for appeals in tax matters would bring down the amount under litigation by Rs 5,600 crore, Finance Minister Piyush Goyal said on Thursday. About 66 per cent of the tax disputes at various levels of judiciary is proposed to be withdrawn out of the total amount of Rs 7.6 lakh crore under litigation in tribunals, high courts and Supreme Court (as of March 2017).
The government on Wednesday increased the threshold for the tax department to file appeal before Income Tax Appellate Tribunal/Customs, Excise and Service Tax Appellate Tribunal (ITAT/CESTAT) to Rs 20 lakh from Rs 10 lakh earlier, for high courts to Rs 50 lakh from Rs 20 lakh and as for the Supreme Court to Rs 1 crore from Rs 25 lakh.
The direct tax department will be able to reduce matters under litigation by total 41 per cent while the indirect tax department would see an 18 per cent reduction in such disputes. Goyal said the decision will benefit small taxpayers even though the process of withdrawal of these cases could take up to a year as the tax department would consult with law officers to ensure cases involving substantial points of law are concluded as they set a precedent for similar cases. The move to hike threshold limit is a step towards ease of doing business, he said.
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