Raising tax threshold may cost govenment Rs 6,000 crore

With Rs 7.6 lakh crore stuck in total tax litigations in the country, the government has decided to double the threshold monetary limit for tax department to file appeals in tribunals and courts.

Published: 13th July 2018 02:00 AM  |   Last Updated: 13th July 2018 07:08 AM   |  A+A-

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By Express News Service

NEW DELHI: With Rs 7.6 lakh crore stuck in total tax litigations in the country, the government has decided to double the threshold monetary limit for tax department to file appeals in tribunals and courts, which will bring down litigation by 41 per cent, and will cost about Rs 6,000 crore to the government, Finance Minister Piyush Goyal said on Thursday.

“In case of Central Board of Direct Taxes, the withdrawal of 41 per cent of the cases will have a revenue impact of Rs 4,800 crore in absolute terms, while in case of Central Board of Indirect Taxes and Customs, withdrawal of 18 per cent of cases will have a revenue impact of Rs 800-1,000 crore,” Goyal said.

However, he added that it would not result in any loss to the exchequer as sometimes cost of litigation is higher than that.

“More than 66 per cent of cases stuck in litigation involve 1.8 per cent in value. In many cases, cost of litigation is higher than the recovery,” the minister said.

The government on Wednesday hiked the threshold limit for filing appeals in tribunals to Rs 20 lakh, while the same for High Courts and the Supreme Court has been raised to Rs 50 lakh and Rs 1 crore respectively.

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