The formation of a GST Appellate Tribunal approved by the Lok Sabha

The Finance Bill, 2023, was approved by the Lok Sabha with some changes, including one that aims to establish the long-awaited GST Appellate Tribunal (GSTAT), which will deal with tax disputes.

What is GST Appellate Tribunal?

  • It will consider appeals against orders issued by the GST authorities or the Appellate Authority as an independent body.
  • The tribunal will be made up of a national bench and several regional benches, all of which will be led by a chairperson chosen by the central government.
  • The proposed tribunal is anticipated to help expedite GST dispute resolution and lessen the burden on the judiciary.
  • If a person is dissatisfied with a lesser court’s decision, he or she may file an appeal with a higher court, the hierarchy of which is as follows (from low to high):
    • Adjudicating Authority
    • Appellate Authority
    • Appellate Tribunal
    • High Court
    • Supreme Court

GSTAT Composition

  • In New Delhi, GSTAT will have a “Principal Bench.”
  • It would consist of the President (likely a retired Supreme Court justice), a judicial member, a technical member (center), and a technical member (right). (state).
  • There will also be state seats.
  • Appeals involving less than Rs. 50 lakh in value that do not involve a question of law could be resolved by a single-member panel, according to GST Council guidelines.

Why is such a Tribunal required?

  • Reduce the load on the judiciary: The GST Appellate Tribunal will assist in resolving the growing number of disputes arising from the 68-month-old indirect tax system, which are currently clogging High Courts and other judicial forums.
  • Improve the GST System’s Efficiency: The establishment of the GST Appellate Tribunal is anticipated to improve the efficiency and efficacy of India’s GST system.
  • The proposed Tribunal will provide an impartial and efficient method for resolving GST-related disputes.
  • Avoiding tax evasion will help to speed up dispute resolution, lower the burden on the judiciary, and encourage greater certainty and predictability in the GST system.

Problems with current lawsuits

  • Issues with compliance: The GST system in India is still relatively new, having been introduced in 2017, and there have been several issues with compliance and interpretation of rules and regulations.
  • Hierarchy of complex adjudication: As previously stated, the current dispute resolution mechanism includes numerous layers of adjudication, beginning with the GST officer.
  • Procedure that takes time: This procedure can be time-consuming, costly, and burdensome for taxpayers, particularly small and medium-sized businesses.
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