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

Sl. No.	Appeal Fora	Present limit for filing appeal (In Rs.)	Enhanced limit (In Rs.)
1.	ITAT / CESTAT	10 lakhs	20 lakhs
2.	High Courts	20 lakhs	50 lakhs
3.	Supreme Court	25 lakhs	1 Crore

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In case of CBDT, out of total cases filed by the Department in ITAT, 34% of cases will be withdrawn. In case of High Courts, 48% of cases will be withdrawn and in case of Supreme Court 54% of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 41%. However, this will not apply in such cases where substantial point of law is involved.

Similarly, in case of CBIC, out of total cases filed by the Department in CESTAT, 16% of cases will be withdrawn. In case of High Courts, 22% of cases will be withdrawn and in case of Supreme Court 21% of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 18%. However, this will not apply in such cases where substantial point of law is involved.

This step will also reduce future litigation flow from the Department side.

Appeal threshold increase reduces departmental tax litigation, narrowing filings to higher value disputes and significant legal questions. Government increases appeal monetary thresholds for departmental tax appeals to reduce low value litigation and focus resources on higher value disputes; the change covers ITAT/CESTAT, High Courts and the Supreme Court and is projected to generate substantial withdrawals and reduced future litigation flow. The reform applies to both direct and indirect tax caseloads but excludes cases involving a substantial point of law, which remain appealable despite the higher cutoffs.