As much as 66% of the tax disputes at various fora will be withdrawn under the government\u2019s plan to increase the monetary threshold for departmental appeals, finance minister Piyush Goyal said on Thursday. However, the move would impact only around Rs 6,000 crore under litigation, a tiny fraction of the total disputed amount of Rs 7.6 lakh crore.\u00a0 The government on Wednesday raised threshold monetary limit for the tax department to file appeal before Income Tax Appellate Tribunal\/Customs, Excise and Service Tax Appellate Tribunal (ITAT\/CESTAT) to Rs 20 lakh from Rs 10 lakh earlier; for cases before high courts, the limit was revised to Rs 50 lakh from Rs 20 lakh; and as for those before the Supreme Court, the threshold was hiked to Rs 1 crore from Rs 25 lakh. The direct tax department will be able to reduce matters under litigation by 41% while the indirect tax vertical would see a 18% reduction in such disputes. \u201cHistorically, the government loses more money as cost of litigation than what it is able to recover from cases involving relatively small tax demands,\u201d Goyal said. However, he said that the process of withdrawal of these cases could take up to a year as the tax department would consult with law officers to ensure cases involving substantial points of law are concluded as they set a precedent for similar cases. \u201cThis is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigation and help the departments focus on high value litigation,\u201d the government said in a statement. It added that the step will also reduce future litigation flow from the department side. Pranav Sayta, tax partner, EY India, said: \u201cThis will enable the tax administration to focus on more important matters rather than spread their energy on a plethora of small matters. It will further the government\u2019s avowed objectives of promoting a taxpayer-friendly environment and help promote ease of doing business.\u201d In the case of the Central Board of Direct Taxes (CBDT), out of the total cases filed by the department in the ITAT, 34% of matters would be withdrawn. Around half the cases in filed in high courts (48%) and the Supreme Court (52%) would stand withdrawn once the new norms come into effect. Similar gains would accrue to the Central Board of Indirect Taxes and Customs (CBIC) with aggregate reduction of 18% in litigation. At the tribunal level, the department would withdraw 16% of the cases while 22% matters in high courts and 21% matter in the Supreme Court would not be litigated any further. \u201cThe revised limits should see elimination of about 30-40% of tax litigation matters presently pending before the tribunal\/courts and costing tax payers heavily. It will also help reducing burden on the courts where there is already long pendency,\u201d said Sanjay Sanghvi, partner, Khaitan & Co.