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Centre takes major steps taken for reducing tax litigations

New Delhi: In order to reduce the long pending grievances of taxpayers and to minimise litigations pertaining to tax matters and to facilitate the Ease of Doing Business, Government of India has decided to increase the threshold monetary limits for filing Departmental Appeals at various levels, be it Appellate Tribunals, High Courts and the Supreme Court in the following manner:

 

Sl. No.

Appeal Fora

Present limit for filing appeal

(In Rs.)

Enhanced limit

(In Rs.)

1.

ITAT / CESTAT

10 lakhs

20 lakhs

2.

High Courts

20 lakhs

50 lakhs

3.

Supreme Court

25 lakhs

1 Crore

 

This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigations and help the Department to focus on high-value litigations.

In the case of CBDT, out of total cases filed by the Department in ITAT, 34% of cases will be withdrawn. In the case of High Courts, 48% of cases will be withdrawn and in the case of the Supreme Court, 54% of cases will be withdrawn. The total percentage of reduction of litigation from the Department’s side will get reduced by 41%. However, this will not apply in such cases where the substantial point of law is involved.

Similarly, in the case of CBIC, out of total cases filed by the Department in CESTAT, 16% of cases will be withdrawn. In the case of High Courts, 22% of cases will be withdrawn and in the case of the Supreme Court, 21% of cases will be withdrawn. The total percentage of reduction of litigation from the Department’s side will get reduced by 18%. However, this will not apply in such cases where the substantial point of law is involved.

This step will also reduce future litigation flow from the Department side.

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