The main indirect taxes were consolidated under the Goods and Services Tax (sometimes abbreviated as GST), which also eliminated their cascading effects. However, since its adoption in the nation, it has caused a great deal of misunderstanding among the general public, which hasn’t been resolved and has ultimately increased the number of lawsuits involving the same. It is rather upsetting that after numerous discussions regarding the creation of a separate appeal tribunal, despite being well aware of the problem, there hasn’t been a defined place for the redressal of GST-related difficulties. The GST Appellate Tribunal (GSTAT), its different components, and the urgency of setting up such a tribunal are all covered in the article.

What is GSTAT?

The abbreviation GSTAT stands for GST Appeal Tribunal, a specialized independent appellate body for the resolution of Goods and Services Tax issues (GST).

GST Appellate Tribunal (GSTAT) Legal background

According to the recommendations of the GST Council, the Central Government is given the authority under Section 109 of the CGST Act to establish the Goods and Services Tax Appellate Tribunal (GSTAT) for the purpose of handling GST appeals brought against decisions made by the first level appellate authority or the revisional authority. The GSTAT’s operations will soon be fully paperless thanks to a recent ruling by the Supreme Court of India.

Need of GST Appellate Tribunal

The following are the reason for the need for GSTAT:

1.  In the absence of the GST Appellate Tribunal (GSTAT), the Appellate Authorities have rejected export refund applications; as a result, taxpayers are helpless against such adverse rulings, which ultimately prevent them from accessing significant operating cash and raise their financial burden. In situations where the cost of capital is exceptionally high, the assumption about the timeline of the grant of the refund is likely to lead to the extra headache of having to obtain the interest of 6% on a delayed refund, which they would have otherwise borrowed from lenders.

2.  Another factor is the problem the taxpayers are having with the accrual of interest on the sums under dispute. When taxpayers receive unfavorable verdicts, which subject them to significant interest obligations on the outstanding debt that are significantly greater than the lending rate of the dominant bank, further delays in GSTAT’s formulation may eventually result in delays in the settlement of the cases.

3.  The difficulties encountered don’t just apply to the issuance of unfavorable appeal orders; they also apply when the First Appellate Authorities find in favor of taxpayers. Due to their presumption that the taxpayer intends to pursue the matter at the next appellate level, the revenue frequently delays the implementation of the orders, which prolongs the never-ending tale.

GSTAT-Related Guidelines

The following suggestions for the Goods and Services Tax Appellate Tribunal have been made by the Group of Ministers (GSTAT)

·         Large states are permitted to have up to 5 benches in the GST Appellate Tribunal (GSTAT), with the main bench’s headquarters proposed to be in New Delhi.

·         A judge from the Supreme Court or the Chief Justice of a High Court shall preside over the panel.

·         In addition to allowing the states to have multiple benches based on population, (or) (and) (and) the number of registered and active GST users, the GoM has reached an agreement with the states regarding the relaxation of the experience criteria for appointing the technical members (25 years earlier as per Council draught).

·         Another suggestion was to form a committee of four people to conduct searches and make selections for the benches. The President of the GSTAT, a State Chief Secretary, and a Union Government Secretary would be appointed to the Benches by the four-member search and selection committee, which will be led by the Chief Justice of the Apex Court or a judge who serves as his proxy.

·         Each of these regional Benches would have a senior tax officer from the Center or the State serving as a technical member and a judicial officer with the rank of HC judge.

·         The technical members/members from the Centre and the State concerned will be on a rotating basis for the purpose of achieving parity in the event that there are 1 or an odd number of Benches in a State.

·         The GOM has also suggested changing Section 110 of the CGST Act, 2017, which deals with appointing the President and Members of the Appellate Tribunal, their qualifications, and conditions of service, to read “State Government,” allowing the state government to relax the experience requirement in the appointment of members of UTs.

Are Alternative Remedies for GST Appeals Still Necessary?

Alternative remedies are unquestionably available for submitting a writ petition before the Hon’ble High Courts. However, in practice, the High Court frequently declines to hear petitions involving “disputed points of fact,” so they cannot be addressed in order to get the proper remedies. Due to disagreements over “facts,” the lower courts and authorities have been unable to resolve the issues at hand because only the Tribunals are considered as “final fact-finding” authorities. Since there is no GSTAT, the High Courts are forced to handle GST^[1] cases, which adds to their workload.

Conclusion

In order to ease the burden on the High Court, provide the much-needed forum for taxpayer redress, and support the swift resolution of tax litigation in the nation, the Government must take into consideration the issues raised by the lack of a Goods and Services Tax Appellate Tribunal and take the necessary steps to establish one as soon as possible. Seek expert advice for GST Appellate Tribunal (GSTAT). You can also reach Bizadvisors.io for more information.

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