Overview of GST Appellate Tribunal

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Table of Contents

GST – Journey so far
Appellate Structure
Goods and Service Tax Appellate Tribunal (GSTAT)
Issues Faced in the Constitution of GSTAT
Initiatives Taken by the Government to set up GSTAT
Key Amendments Proposed by GoM
Constitution of Benches Pre and Post Finance Act 2023
Forthcoming Challenges

1. GST – Journey so far

Introduced in July 2017, replacing a set of Central and State taxes such as Central excise, State value added tax (VAT), Service tax etc.
Destination-based consumption tax wherein Centre and State simultaneously levy tax on a common base
Significant increase in number of compliant GST payers with average monthly GST collection of INR 1.5 lakh crore in FY 2022-23
Sharpened checks and balances by tax authorities, with significant reduction of manual intervention
Integrated technology and introduced e-invoicing, e-filing of refunds, online appeals and auto approved letter of undertaking (LUT) etc.
GST Appellate Tribunal (GSTAT) to be set-up for smooth functionating of GST

2. Appellate Structure

Supreme Court

Cases decided by principal bench of appellate tribunal
HighCourt

High Court

Appeal against the order passed by state appellate tribunal
Appeal for cases involving question of law

Appellate Tribunal

Appeal against order passed by appellate authority and revisional authority
Consisting of State benches and Principal bench

Appellate Authority

Consist of Commissioner (Appeals) or Joint Commissioner (Appeals)
Appeal against order passed by adjudicating authorities

Jurisdictional Officers

Order to be passed within 3 years (5 years in case of fraud) from the due date of annual return

3. Goods and Service Tax Appellate Tribunal (GSTAT)

Significance of GSTAT

First common forum for resolving disputes from State & Centre perspective

Increasing Trend in GST disputes

Disputes regarding levy, valuation, classification, eligibility of credit (including transitional credits) and refunds are increasing
Departmental audit, investigation, enquiry and scrutiny leading to increased disputes

Hardships Faced by Taxpayers

Aggrieved taxpayer has to approach High Court through writ, post receipt of an order from an Appellate Authority
Due to pending backlog, High Courts are unable to dispose off the matters expeditiously

GSTAT – Pressing Priority

Almost 6 years of implementation of GST, discussions around setting up GSTAT are still in progress
Expected to see increase in number of litigations in near future as the limitation period of three years from the due date of the annual return for FY 17-18 and FY 18-19 is fast approaching

4. Issues Faced in the Constitution of GSTAT

Parity of share of members between State and Center
Qualification and experience criteria of technical members
Number and constitution of benches
Constitution of a search cum selection committee
Ratio of judicial and technical members
Eligibility of lawyers to be appointed as judicial members

In the absence of GST Tribunal, taxpayers are compelled to evaluate the appropriateness of approaching High Court based on the merits, monetary impact and potential exposure.

5. Initiatives Taken by the Government to set up GSTAT

Constitution of Group of Ministers (GoM) to recommend necessary amendments
Amendments proposed in Finance Bill 2023 presented before Lok Sabha
Extension of timeline to file appeal, based upon setting up of GST appellate tribunal
Resolved issue relating to the ratio between judicial and technical members and parity of share of members between state and center

6. Key Amendments Proposed by GoM

Principal bench of tribunal with state level benches across the country
Each bench consist of judicial and technical member in equal proportion
States with less than 5 crore population should have maximum 2 benches and no State to have more than 5 benches
Qualification of members and terms of appointment and re-appointment

7. Constitution of Benches Pre and Post Finance Act 2023

In case of NR to R: Shares can not be transferred at more than fair value

Before the proposed amendment in Finance Act, 2023
After the proposed amendment in Finance Act, 2023

Bench
Constitution
Bench
Constitution

National bench (In New Delhi)
A president and one technical member each from State and Centre
Principal bench A president, a judicial (In New Delhi)
A president, a judicial member and one technical member each from State and Centre

Place of supply cases to be heard by this bench only

Regional bench (based on notification issued by Government)

State bench
(bench in each State based on notification issued by Government)

Area bench
(based on receipt of request from any State Government or recommendation of council)

A judicial member and one technical member each from State and Centre
State bench (based  on the request of States and two technical members recommendations of Council)
Two judicial members and two technical members representing the State and Centre

8. Forthcoming Challenges

Eligibility of lawyers for selection of judicial member

 Advocates having more than ten years of experience are being considered for selection as judicial members in Income TaxAppellate Tribunal, CESTAT, the Sales Tax/VAT Tribunals
Proposed amendment can be challenged by lawyers

Amendments to be notified

Proposed amendments are yet to be notified
Another 10 months will be required for GSTAT to be fully functional

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