Govt Considering Arbitration Mechanism to Resolve Tax Disputes in Budget 2025

The government is considering implementing an arbitration mechanism to resolve tax disputes in Budget 2025. This initiative aims to streamline dispute resolution and reduce pending tax litigation. The proposed mechanism would provide an alternative to traditional court proceedings, potentially offering faster resolution and reduced costs for both taxpayers and the government. The system would likely involve independent arbitrators with expertise in tax matters who would hear cases and make binding decisions. This approach aligns with international best practices and could significantly reduce the backlog of tax cases in various courts. The mechanism is expected to cover both direct and indirect tax disputes, with specific guidelines on eligibility criteria and procedural aspects. Implementation details are being finalized, with stakeholder consultations underway.