Centre hikes monetary limit for filing tax appeals

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

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 the Central Board of Direct Taxation (CBDT), out of total cases filed by the Department in Income Tax Appellate Tribunal (ITAT), 34% of cases will be withdrawn.

For High Courts, 48% of cases will be withdrawn and in the case of the Supreme Court, 54% of cases will be withdrawn.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 a substantial point of law is involved.

Similarly, in case of Central Board of Excise and Customs (CBIC), out of total cases filed by the Department in Customs, Excise and Service Tax Appellate Tribunal (CESTAT), 16% of cases will be withdrawn. In the case of High Courts, 22% of cases will be withdrawn and in the case of Supreme Court, 21% of cases will be withdrawn.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.