Indian authorities fix 'monetary limits' for tax appeals

Indian tax authorities have fixed 'monetary limits', below which appeals cannot be filed in the Tribunal, High Court and the Supreme Court in cases involving disputes relating to amount of duties and taxes and refund claims from July 1, 2011. Tax experts told Business Recorder here on Saturday that in Pakistan there are no minimum monetary limit fixed for filing of appeals before any appellate forum.
The fixation of such monetary limit would be tantamount to taking away the right of the taxpayers to file appeal against the frivolous assessments by the authorities. Thus, such kinds of monetary limits are not applicable in Pakistan to facilitate the taxpayers to freely file appeals against possible frivolous assessments framed by the tax department, the experts added.
The Central Board of Excise and Customs of India has issued instructions on August 17, 2011 to all Chief Commissioners and Directors General under the Central Board of Excise and Customs and Commissioners of Customs/Central Excise/Service Tax/All Joint Chief Departmental Representatives /Commissioner, Directorate of Legal Affairs.
The minimum monetary limit fixed for filing of appeals in tribunals is Rs 5,00,000, High Courts Rs 10,00,000 and monetary limit fixed for Supreme Court is Rs 25,00,000. According to the instructions of the Central Board of Excise and Customs, India, on 'Reduction of Government litigation - providing monetary limits for filing appeals by the Department before tribunals/High Courts and Supreme court', for ascertaining whether a matter would be covered within or without the aforementioned limits, the determinative element would be duty/tax under dispute.
To illustrate it further in a case involving duty of Rs 0.5 million or below with equal penalty and interest, as the case may be, no appeal shall be filed in the Tribunal. Similarly, no appeal shall be filed in the High Courts if the duty involved does not exceed Rs 1.0 million with or without penalty and interest. Further, the Commissionerates shall not send proposal to the Board for filing Civil Appeal or Special Leave Petition in the Supreme Court in a case involving duty up to Rs 2.5 million, whether with penalty and interest or otherwise.
However, where the imposition of penalty is the subject matter of dispute and if the said penalty exceeds the limit prescribed, then the matter could be litigated further. Similarly, where the subject matter of dispute is the demand of interest and if the amount of interest exceeds the prescribed limit, then the matter may require further litigation.
It further said that in a case where a part of the duty demanded is not disputed and is paid and the outstanding duty under dispute is less than the monetary limit prescribed by the Board, no appeal shall be filed. In other words, monetary limit shall apply on the disputed duty and not on the total duty demanded in a case. It is clarified that the monetary limits being prescribed by the Board would apply to cases of refund as well, it added.