The Goods and Services Tax (GST), which came into effect on 1st July 2017, is India’s single indirect tax mechanism that supplanted several central and state taxes. While GST has made taxation easier and compliance better, its implementation has resulted in many disputes and litigations. Such disputes could occur due to improper categorization of goods or services, incorrect tax rates, refusal to grant input tax credits, mismatch in returns, refusal of refunds, or a conflict in the interpretation of GST provisions. Taxpayers and enterprises would also experience challenges with show-cause notices, penalties, audits, and assessments initiated by tax authorities.
To address these issues, a formal mechanism for resolving disputes under GST law has been established. These are then resolved by dispute-settling authorities, such as GST officers first. If the taxpayer is not satisfied with an order, they can appeal in higher courts like the Appellate Authority, Appellate Tribunal, High Courts, and finally the Supreme Court. To further strengthen the legal process, the GST Act has introduced a Goods and Services Tax Appellate Tribunal (GSTAT), which will speed up and specialise in settling disputes.
Therefore, GST problems and the related courts are crucial in maintaining justice, uniformity, and trust in India’s indirect tax regime.
GST Appellate Tribunal
The Goods and Services Tax Appellate Tribunal, also known by the acronym GSTAT, is the second appellate level in the GST legal system under Section 109 of the CGST Act of 2017. The quasi-judicial body was instituted to settle conflicts between taxpayers and GST authorities that arise after the adjudication and first appeal levels. The tribunal is committed to ensuring complex GST issues are heard quickly, uniformly, and by specialised knowledge across India.
GSTAT is an independent appellate authority that allows taxpayers to appeal against orders issued by the First Appellate Authority (Commissioner Appeals). The tribunal is designed to alleviate the workload on High Courts and streamline the litigation process within the GST framework.
The structural frame of GSTAT consists of a Principal Bench, typically based in New Delhi, and multiple State Benches that are dispersed in different states.
To uphold equitable adjudications that reflect both legal and taxation expertise, every bench has both judicial and technical members, drawn from both the Central and State governments.
Recent efforts have been made to get GSTAT operational across the country. Upon being fully operational, GSTAT is likely to go a long way in bringing about uniformity of tax rulings, consistency in the interpretation of GST laws, and improved taxpayer trust in the resolution process.
Membership and Composition of GSTAT
Goods and Services Tax Appellate Tribunal (GSTAT) is a quasi-judicial body constituted under Section 109 of the Central Goods and Services Tax (CGST) Act, 2017. GSTAT operates as the second appellate forum for the settlement of disputes in the GST regime. The composition and organisation of GSTAT have been carefully designed to ensure an impartial, balanced, and expert-based adjudication process that combines both legal as well as tax administration perspectives.
The heterogeneous and harmonious mix of members in GSTAT guarantees that the tribunal is well equipped with deep knowledge of both tax policy and legal principles. With judicial and technical experts from the Centre and the States, GSTAT becomes a robust platform for settling complex GST disputes and offering fair justice to taxpayers and the government alike. The establishment of GSTAT is a major step towards strengthening the system of resolving GST disputes in India.
A. Composition of GSTAT
GSTAT is divided into the following categories of benches:
1. Principal Bench
- Based in New Delhi
- Headed by the President of the Tribunal
- Resolves cases raising issues of cross-jurisdictional or national significance
2. State Benches
- Based in different states across India
- Resolve disputes arising within the state in which they are based
B. Composition of Benches
Every bench, whether Principal or State, is composed of one judicial member, one technical member from the Centre, and one technical member from the State.
This triad composition provides for the Judicial Member to bring in a legal view, the Technical Member (Centre) to bring in experience with central tax administration, and the Technical Member (State) to bring in views relevant to the state.
C. Qualifications for Members
1. The President (Judicial Head) should have been a judge of the Supreme Court or the Chief Justice of a High Court.
2. Judicial Member
Either a High Court Judge, a District Judge of not less than 10 years’ standing in judicial service, or an Advocate of at least 10 years’ practice in tax law.
3. Technical Member (Centre):
- Should have been or be an officer of the Indian Revenue Service (IRS) in Customs & Indirect Taxes.
- Should have at least 25 years of experience in Group A service and be eligible for selection at the level of Additional Secretary.
4. Technical Member (State):
- Should have been or be an officer of the State Government in the State Tax Department.
- Should possess a similar rank and experience of service as the Technical Member from the Centre.
D. Appointment & Tenure
- Members are appointed by the Central Government in consultation with a Search-cum-Selection Committee.
- Members usually hold office for a period of four years or until attaining the age of 65 years, whichever is earlier.
- Reappointment of members may be done if they continue to be eligible and have been performing satisfactorily.
E. Independence and Functioning
- GSTAT shall be in operation independently of the tax administration.
- It is empowered to summon, interrogate, and rule on issues of fact and law.
- Appeals to GSTAT shall be made within 3 months of the order of the first appellate authority.
Fees and Application Procedure
The GST Act, 2017 requires a fee to be paid on filing an appeal to the Goods and Services Tax Appellate Tribunal (GSTAT). The fee regimen is defined below:
- Appeal Filing Fee: A payment equal to the tax, interest, fine, or penalty involved shall be made, up to ₹50,000 for an appeal.
- No fee for departmental appeals: In case of an appeal filed by the GST Department (Government), no fee is required.
This charge ensures that the appeal will be treated seriously and helps to fund administrative expenses.
Process of application:
- Check Eligibility: Ensure that you have an order from the First Appellate Authority (e.g., Commissioner (Appeals)).
- Draft Appeal: Write the appeal, including case facts, reasons for appeal, and the relief sought.
- Obtain Documents: Get necessary documents like the impugned order, GST registration details, evidence of tax payment, etc.
- Pay Fees: Pay the appeal fee (up to ₹50,000) through the GST website or a sanctioned bank.
- Fill Form GST APL-05 (as per GST instructions) and file it online or as instructed.
- File with Tribunal: Submit the appeal, documents, and fee receipt with the concerned GSTAT bench (Principal or State Bench).
- Receive Acknowledgment: Get the appeal petition acknowledged on your side for your reference.
- Wait for Hearing Notice: The GSTAT will notify you of the date of the hearing.
Powers of GSTAT
The Goods and Services Tax Appellate Tribunal, created under Section 109 of the CGST Act, 2017, is vested with various judicial and administrative powers to settle GST disputes effectively. Such powers are intended to ensure that GST appeals are handled in an equitable, expeditious, and impartial manner. The GSTAT serves as an effective and independent appellate forum, having judicial and quasi-judicial authority to deliver fair decisions in GST disputes. Its jurisdiction is akin to that of a civil court, so that disputes are resolved by following proper legal procedures and ethics. This will help in boosting taxpayer confidence and ensuring the uniform implementation of GST laws.
1. Appellate Powers
GSTAT can hear appeals against rulings given by the First Appellate Authority [Commissioner (Appeals)]. It can confirm, amend, or revoke orders on the basis of facts and prevailing laws. It also has the power to grant reliefs like refunds, remission of penalty, or direction for reassessment.
2. Powers of the Civil Court
Under Section 117(6) of the CGST Act, GSTAT has powers similar to those of a civil court, including the power to issue summons and hold oath examinations, as well as to discover and produce documents.
This includes taking evidence through affidavits, requisitioning public documents, and issuing commissions to examine witnesses or documents.
These powers enable GSTAT to collect the required evidence and ensure standards for a fair trial.
3. Ability to Regulate Its Own Procedures
GSTAT can determine its own rules of procedure, hold hearings, allow adjournments, make ex parte orders, and rehear matters, as well as make interim orders such as stays on recovery or procedure.
4. The Compulsory Character of Decisions
Rulings made by GSTAT are binding on taxpayers and departments unless reversed by the High Court or the Supreme Court.
5. Rectification of Mistakes
As per Section 113 of the CGST Act, GSTAT is allowed to correct any apparent errors in its orders within a specified timeframe (ordinarily three months).
6. Ex Parte Orders Review
In cases where a party fails to turn up and an ex parte order is passed, GSTAT has the power to review and cancel the order in case there is sufficient reason for the party’s absence.
7. No Power to Grant an Injunction
GSTAT lacks the authority to issue an injunction against the government to prevent it from collecting taxes or initiating enforcement proceedings unless specifically authorized under law.
Duties of GSTAT
GSTAT also has a key role in reconciling taxpayers’ and tax authorities’ interests by ensuring an impartial and authoritative mechanism for GST dispute resolution. It also promotes voluntary compliance and accountability through impartiality, legal acumen, and timely decisions. The Goods and Services Tax Appellate Tribunal (GSTAT), set up under Section 109 of the CGST Act of 2017, has crucial responsibilities to ensure honest, uniform, and quick GST matter adjudication. Its core role is appellate in nature, alongside upholding legal discipline and consistency in GST law interpretation all over India.
1. Adjudicate Appeals Fairly
The primary responsibility of GSTAT is to receive and determine appeals against orders made by the First Appellate Authority. It has to:
- Consider the facts and legal reasons adduced
- Hear both parties
- Deliver a reasoned and impartial judgment
2. Promote Consistency of Tax Interpretation
GSTAT must aim at uniformity in the application of GST laws between jurisdictions. Its decisions serve as fundamental precedents, forestalling contradictory state or regional interpretations.
3. Protect Taxpayer Rights
Being an autonomous body, GSTAT is mandated to protect the rights of taxpayers through fair hearings, strict observance of due process, and preventing arbitrary exercise of powers by lower authorities.
4. Encourage Effective Dispute Resolution
GSTAT is supposed to play an important role in reducing the workload of High Courts by resolving complex GST cases at the appellate level. It is required to pass judgments within prudent time limits and promote efficient tax dispute settlement.
5. Maintain Legal and Constitutional Standards
The orders of the tribunal should be in compliance with the provisions of the Constitution, the GST Act, and settled doctrines of natural justice. It should not pass orders that are too general or discriminatory.
6. Scrutinise and Correct Mistakes
GSTAT is required to correct any apparent inaccuracies in its orders that are recognized or pointed out under provisions of law. This ensures the validity of its orders.
7. Document and Convey Orders Correctly
Orders need to be properly recorded, conveyed to the concerned party, and posted as per regulations.
Conclusion
GSTAT is crucial to providing impartial, transparent, and effective resolution of GST disputes. Being a specialised appellate tribunal, it safeguards taxpayer rights, ensures tax interpretation uniformity, and enhances legal compliance. The institution of GSTAT is a big step toward a strong and credible GST dispute resolution system.
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