Industry Body Pushes for Faster Tax Dispute Resolution; Calls for Clearing High-Value Appeals Within a Year

Industry Body Pushes for Faster Tax Dispute Resolution; Calls for Clearing High-Value Appeals Within a Year

Issue: To address the severe backlog in tax litigation (estimated at nearly ₹18 lakh crore in disputed demand), the Confederation of Indian Industry (CII) submitted pre-Budget recommendations urging the government to fundamentally transform the tax system from “dispute-driven” to “dispute-preventive”.

Facts:

• More than five lakh appeals involving nearly ₹18 lakh crore of disputed demand are currently pending before Commissioners (Appeals).
• The industry seeks a more modern, transparent, and technology-enabled tax regime to support the Viksit Bharat 2047 vision.

Decision:

The Confederation of Indian Industry (CII) formally submitted a comprehensive set of recommendations to the Revenue Secretary, focusing on mandatory timelines for high-value case resolution and institutional reforms.

Key TakeDowns (Proposals Submitted by CII):

• Time-Bound Resolution for High-Value Cases: CII proposed that all high-demand cases above ₹100 crore be resolved under close monitoring by the Central Board of Direct Taxes (CBDT) within one year, utilizing multiple virtual hearings.
• Revival of Advance Rulings: CII recommended reviving the Authority for Advance Rulings (AAR) as an independent, quasi-judicial body headed by retired High Court judges, with a mandate to deliver binding rulings within six months. It also suggested allowing joint applications from industry associations for sector-wide clarity.
• Statutory Taxpayer Rights Charter: CII proposed elevating the existing taxpayer charter into a statutory taxpayer rights charter, legally guaranteeing time-bound refunds, faceless assessments and appeals, and accountability for administrative delays.
• TDS Simplification: The complex Tax Deducted at Source (TDS) regime (with over 35 categories) should be simplified to two or three broad groups, and transactions between GST-registered entities should be exempted from TDS altogether.
• Decriminalization: CII called for the removal of minor, non-wilful offenses from prosecution provisions in both direct and indirect tax laws, treating small procedural defaults as civil matters.
• Digital Customs: The final proposal called for a phased roadmap towards paper-free customs by 2028, utilizing e-refunds, e-adjudication, and e-appeals.