sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
GST - Goods and Services Tax »
 GST compliance: Govt plans to go easy on businesses till polls
 Government faces shortfall in GST collection
 Proposal to encourage taxmen to file GST profiteering complaints
 GST at an inflection point, effortsmust be made to fine-tune structure
 GoM on revenue shortfall to study GST collection on services by states
 GST: These 10 judgments should offer clarity on ambiguous rules
 Here's what will become cheaper for you GST Council meet
 Government notifies new annual GST return forms
 Goods And Service Tax (GST) Concept & Status As On 1st January, 2019
 GST net: Spotting tax evasion easier under new regime
 9 Facts You Must Know about the New GST Limit of Rs40 lakh

GST will aggravate Indias huge tax litigation problem
February, 13th 2018

Litigation, said Ambrose Bierce, is a machine which you go into as a pig and come out of as a sausage. To get a sense of how many pigs are being turned into sausages in India, or how severe the problem of lawsuits can get, look no further than this year’s Economic Survey. It points out that more than 200,000 tax cases, amounting to nearly 4.7% of India’s gross domestic product (GDP), are stuck in appellate litigation across all levels of the judiciary. The introduction of a rather complex goods and services tax (GST) will aggravate the problem.

“Many a time, tax officers consider issuing tax notices and leave it to the courts to finally take a call on the tax position. This gets accentuated on matters where more than one interpretation is possible. Also, once a tax demand had been issued for a particular year, recurring notices are issued for all subsequent years till the matter attains finality. This increases litigation manifold and the amount stuck becomes huge,” said Anita Rastogi, indirect tax partner at PwC India.

This is possibly one reason why the majority of the cases are finally decided in favour of the taxpayer. The Economic Survey says the department loses 65% of its cases and what’s more, the success rate of the department has been declining.

Thankfully, some measures were announced in the Union budget to smooth the dispute resolution processes and to reduce litigation. Improvements have been made in the advance rulings system, pre-notice consultations and in the rules for show cause notices.

However, the survey does not cover the impact of GST implementation and global experience shows that during initial years of GST implementation, tax litigations dramatically shoot up. India is unlikely to be an exception, especially given the controversial anti-profiteering clause.

“So far, after GST implementation, more than two dozen writ petitions on different issues have already been filed in various courts. While the GST Council is pragmatically addressing the matters reaching the writ Courts, new issues such as benefits to backward areas may add to the already pending list,” said Abhishek A. Rastogi, partner, Khaitan and Co.

Since there are plenty of grey areas with respect to GST, some tax experts say that one way to nip this problem in the bud would be to include the concept of pre-notice consultation in GST rules as well.

Jane McCormick, global head of tax, KPMG in the UK said that a further simplification of India’s complicated GST framework would prove helpful in containing the litigation menace. “Given the size of the Indian economy, GST-related teething troubles could last for more than three years. So, there probably will be an increase in litigation, but I hope India benefits from other people’s experiences on that because it does come back down to having a simpler system. The more complexity there is in the system, bigger the chances that people will disagree and have to litigate. Even a very simple thing, like the difference between confectionary and food will end up litigating it out,” she said.

A user-friendly GST would not only lower litigation, but also boost compliance and consequently revenue collections, which so far have been below expectations.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System development CMS development Content Management Solutions CMS Solutions Content Management Services CMS Services CMS Software

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions