The Indian government is said to be considering the implementation of an arbitration mechanism to handle tax disputes. This move could greatly reduce the burden of litigation on taxpayers and officials.

It is believed that the upcoming Budget 2025 may include a framework that promotes arbitration as the preferred method for resolving such disputes. The aim is to improve the ease of doing business and reduce the backlog of cases at various adjudication levels.

Talks are underway regarding the formation of a dedicated team to manage an arbitration desk, which would serve as an alternative dispute resolution mechanism for tax-related issues. Experts in taxation are optimistic about this initiative, as they believe that arbitration or mediation could effectively put an end to pending disputes, benefiting both the government and taxpayers. A decision on this proposal is expected once the budget outlines are finalized.