Government to forego nearly Rs 6,000 crore locked in tax disputes

The Centre has decided to raise the threshold limits for filing tax appeals in tribunals and courts. As a consequence of this, the Centre will have to forego nearly Rs 6,000 crore that is locked in disputes. The decision is expected to effectively reduce minor litigations and help the Department of Revenue to focus on high value litigations, finance minister Piyush Goyal said.

Tax disputes worth Rs 7.6 lakh crore were stuck in various stages of litigation in tribunals, high courts and the Supreme Court as of March 2017, Goyal said.

Overall, the department of revenue will be withdrawing 29,850 appeals before various forums and therefore, reduce litigation by 37 per cent. In the case of CBDT (Central Board of Direct Taxes), the withdrawal of 41 per cent of the cases, will have a revenue impact in absolute terms of Rs 4,800 crore, while in case of CBIC (Central Board of Indirect Taxes and Customs) withdrawal of 18 per cent of cases will have a revenue impact of Rs 800 crore.

Now, appeals are to be filed in the Income Tax Appellate Tribunal or Customs Excise and Service Tax Appellate Tribunal only if the tax amount involved is Rs 20 lakh or more, up from Rs 10 lakh at present.

Appeals will be filed in high courts only if the tax amount involved in litigation is Rs 50 lakh, up from Rs 20 lakh at present and for appeals in the Supreme Court, the threshold limit has been hiked to Rs 1 crore, from Rs 25 lakh at present.