New Delhi The Goods and Services Tax (GST) Council may consider setting up a GST Appellate Tribunal (GSTAT) this month for the expeditious resolution of indirect tax litigation to further reduce the compliance burden for taxpayers and provide a common forum for dispute resolution between the Centre and states, two officials aware of the matter said.

A group of ministers (GoM), constituted to iron out issues pertaining to GSTAT, has submitted its report and the 49th meeting of the GST Council is expected to consider this matter in 10-15 days, the officials added, requesting anonymity. The Council, in its 47th meeting on June 28-29, 2022, formed a GoM to address various concerns raised by the states over the constitution of the tribunal. 

Explaining the importance of tribunal, one of the officials cited above said: “There are two benefits. One, the taxpayers [businesses] will get rid of costly, lengthy and time-consuming appeal processes of high courts as the proposed tribunal will be the forum of second appeal under the GST laws. Secondly, and more importantly, it may become the first common forum of dispute resolution between the centre and the states.” 

Even as the Union cabinet on January 23, 2019 approved the creation of a national bench of GSTAT, the matter was pending because of differences among members on issues such as how to maintain the right federal balance, and other technical matters. In order to resolve these concerns, a six-member GoM was notified on July 7, 2022, the official added. 

It is expected that the tribunal will be a common forum that will ensure uniformity across the country in redressal of disputes arising under the GST regime, he said. 

According to a second official, in the absence of an exclusive tribunal for GST, there were some cases of overreach, where local GST authorities pressurised taxpayers to pay the assessed tax amounts even if the assesses contended these were arbitrary and erroneous. As filing of appeal in high courts is time-consuming and costly, and so many taxpayers pay GST dues under protest, the second official added. 

As per the law, GSTAT is the forum of second appeal for all disputes between businesses and GST authorities,and the first common forum of dispute resolution between Centre and states. The Section 109 of the CGST Act “empowers the Centre to constitute, on the recommendation of Council, by notification, with effect from such date as may be specified therein, an Appellate Tribunal” known as GSTAT. The law envisages the constitution of the national bench, the state bench and area benches. 

Experts said the constitution of GSTAT is already much-delayed, and it is one of the key requirements for bringing more efficiency in the indirect tax regime. Ankur Gupta, practice leader for indirect tax at SW India, said: “It has been now five years and the non-availability of the GST tribunal has increased the workload of high courts being the only remedy available to taxpayers.” 

“The GST tribunal represents the second stage of appeal under the GST law. The GST tribunal is yet to be formed and we understand that while this is a priority and focus area for the government, there are some teething challenges in constitution of this judicial body,” Siddharth Surana, director at consultancy firm RSM India said. 

Currently, taxpayers who are aggrieved by adverse orders passed by the authorities are compelled to approach high courts for redressal, he said. “This is resulting in delays in serving justice and also not bringing any clarity with regard to interpretation of vexed issues in GST,” he added.