The step will effectively reduce minor litigations and help the department of revenue to focus on high value litigations
The finance ministry will forego close to Rs 6,000 crore as it decided to increase monetary limit for tax authorities to file appeals in various tribunals and courts, Finance Minister Piyush Goyal said today.
Overall, the department of revenue will be withdrawing 29,850 appeals before various forums and therefore, reduce litigation by 37 percent.
The finance ministry on Wednesday said that the enhanced limit for filing an appeal in case of tribunals is Rs 20 lakh, up from Rs 10 lakh. The limit has been raised to Rs 50 lakh from Rs 20 lakh in case of high court and to Rs 1 crore from Rs 25 lakhs for Supreme Court.
The move is aimed at reducing long-pending grievances of taxpayers and to minimise litigations pertaining to tax matters and to facilitate ease of doing business.
“Rs 7.6 lakh crore worth tax disputes (direct and indirect taxes) are stuck in various stages of litigation in tribunal, High Court and Supreme Court at end of March 2017,” Goyal said told the reporters here today.
As result, total of 26,812 cases, or 41 percent of the pending cases filed by the apex direct tax policy making body Central Board of Direct Taxes (CBDT), will be withdrawn from levels of litigation. The tax impact of this would be 0.82 percent of the litigation amount, Goyal said.
Similarly, 18 percent of the cases will be withdrawn by Central Board of Indirect Taxes and Customs (CBIC), the apex policy making body of indirect tax, which will have total revenue implication of 1.45 percent of the total litigation amount.
“In case of CBDT, 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, withdrawal of 18 percent of cases will have a revenue impact of Rs 800 crore,” Goyal said.
Goyal further said that the step taken by the government will effectively reduce minor litigations and help the department of revenue to focus on high value litigations.
GST Rate Cut
Regarding a possibility of Goods and Services Tax (GST) rate cut on items in the next GST Council meeting on July 21, Goyal said there is a 'chance’, provided there is a ‘meritorious reason’. However, revenue collection also needs to be looked at before considering rate cuts.
“GST Council has already reduced rates on 328 items, so you may possibly find some chance in anything where there is a meritorious reason,” he said.Goyal also said that the Council will discuss ease of return filing and assessment in the next meeting.