State Finally Passes the Long-Awaited GST Appellate Tribunal Law

The central government has now cleared the impending decision to set up the national GST Appellate Tribunal. With the new amendment, the state governments across India must make the relevant changes in their respective GST (Goods & Service Tax) laws by the end of October 2023 and set up an appeal bench within their states by the end of December 2023. The principal branch of the appellate court will be in Delhi.

This addition has relieved taxpayers, industries, and tax authorities. Since the inception of the GST in July 2017, people only had the option to write petitions in the high court wrt. their GST grievance and GST complaints. This caused a surge in unresolved legal cases, which has constantly been a cause of concern for both parties involved.

With the constitution of tribunal benches across the states, people will get their issues addressed by their respective state benches and expect a speedy recovery of their grievances.

As per the new reform, a single member of the appeal bench can address the dues and fines of Rs 50 Lakh and below. These dues can be related to taxes, input tax credits, fees, or penalties. But the cases should not involve any question of law, and the order in which the GST grievances are taken solely depends on any appellate or revisional authority.

Council Members & Selection Criteria

To search and select the members of the appeal bench, a four-member council will be formed comprising of

• President of the appellate tribunal (one of the judicial members of the principal bench),
• The chief justice of the Supreme Court or his representative judge from the SC,
• Union government secretary,
• and a state chief secretary nominated by the council.

There is also the chairperson, who has the authority to a casting vote. This committee is responsible for selecting the members of the state appellate tribunals.

There will be a total of two judicial and two technical members in the principal bench and each state bench. They have equal representation from the Centre and states regarding technical members.

Also, a state has the liberty to set up as many local benches as they wish after getting permission from the GST council.

Setting up a GST Appellate Tribunal brings numerous benefits to both taxpayers and the tax administration system. First and foremost, the tribunal will ensure an independent and impartial GST complaints and input tax credits’ resolution process, instilling trust and confidence among taxpayers.

With experienced members with specialized knowledge in tax laws, the tribunal will offer expertise and specialization, leading to well-informed, accurate & fair decisions on appeals. This will promote fairness and ensure uniformity and consistency in the interpretation and application of GST laws, reducing ambiguity and creating a more predictable tax environment.

Another significant advantage of the Appellate Tribunal is expediting dispute resolution. By establishing a dedicated forum for GST appeals, the tribunal can help streamline the process, resulting in faster decision-making and timely relief for taxpayers. This will subsequently reduce the backlog of appeals but also prevent the unnecessary burden on higher courts.

Moreover, the decisions made by the Appellate Tribunal will hold significant legal weight and can serve as precedents. This can contribute to developing jurisprudence and guide taxpayers and tax authorities in similar cases. By establishing legal precedents, the tribunal enhances clarity and predictability in interpreting GST laws, reducing the scope for litigation and promoting consistency in decision-making.

Such a tribunal will play a vital role in ensuring a fair and efficient tax administration system under the GST regime. It will be a welcome change in making India’s GST more systematic and methodical.