The central board of excise duty and customs (CBEC) has raised the capital threshold for filing appeals over indirect taxes. The limit is 10 lakhs in Custom Excise and Service tax appellate tribunal (CESTAT) and 15 lakhs in the high court, earlier the limit was 5 lakhs and 10 lakhs respectively. Appeals below this should not be filed by the department in courts or appellate. CBEC and the finance ministry brought about this change to reduce litigations and disputes with business entities. At present 5.5 trillion worth government revenue is locked up in 3 lakh legal battles. CBEC has instructed officers to withdraw cases in high court and CESTAT which were similar to previous cases where the department has lost the case in the Supreme Court and no review was obtained from it by them.
As a result 2,051 and 5,261 cases were identified for withdrawal from the high court and CESTAT respectively. The high court has allowed withdrawal of 250 cases and the tribunal has allowed 202 cases. Principal Commissioners or commissioners are instructed to hold a pre show cause notice meeting with the representative of the entity where the duty is above 50 lakhs. Union Finance Minister Arun Jaitley brought in the new Dispute Resolution Scheme (DRS) in the 2016-17 budget. Under the scheme a taxpayer can settle disputed tax along with interest up to date and settle his or her case. No penalty will be charged over the disputed tax amount summing up to 10 lakhs and cases above 10 lakhs will have a 25 percent penalty. These steps are taken to build a simple tax regime without litigations