Union Finance Minister Piyush Goyal on July 12 said that the government is likely to cut 41 percent of tax cases following an increase in threshold limit for filing appeals in tribunals.
“The government hopes to cut 41 percent of tax cases after raising threshold limit for filing appeals in tribunals and courts,” Goyal said this while addressing media.
“Income-tax refunds worth over Rs 70,000 crore have been issued to the taxpayers. Tax cases worth Rs 5 lakh crore stuck in litigation; new thresholds will lead to a reduction of 18 percent in tax cases,” he added.
“In case of CBDT (Central Board of Direct Taxes), the withdrawal of 41 percent 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 percent of cases will have a revenue impact of Rs 800 crore.
New thresholds for the tax department to file appeals:
He added, “Often it has been found that the cost of litigation is greater than the recovery amount… So to minimise litigation, the government has decided it will not file any appeals in appellate tribunals, High Courts and the Supreme Court in cases involving an amount less than Rs 20 lakh, Rs 50 lakh and Rs 1 crore (respectively).”
The Finance Ministry statement said, “This is a major step in the direction of litigation management of both direct and indirect taxes, as it will effectively reduce minor litigation and help the department to focus on high value litigation.”
While hailing the move Arun Jaitley’s tweet read, “Excellent move by the CBDT & CBIC…Good to trust those who pay taxes.”