Goods and Services Tax (GST)

GST Appellate Tribunals to be set around July or August

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GST Appellate Tribunal

Mains level : Not Much

Introduction

  • The Goods and Services Tax (GST) Appellate Tribunals, eagerly anticipated to address taxpayer disputes within the six-and-a-half-year-old indirect tax regime, are set to commence operations around July or August.

What is GST Appellate Tribunal?

  • The GST Appellate Tribunal is a quasi-judicial body proposed to be established to resolve disputes related to the Goods and Services Tax (GST) in India.
  • It will function as an independent body to hear appeals against orders passed by the GST authorities or the Appellate Authority.
  • The tribunal will be composed of a national bench and various regional benches, headed by a chairperson appointed by the central government.
  • The proposed tribunal is expected to help expedite the resolution of disputes related to GST and reduce the burden on the judiciary.

Under GST, if a person is not satisfied with the decision passed by any lower court, an appeal can be raised to a higher court, the hierarchy for the same is as follows (from low to high):

  1. Adjudicating Authority
  2. Appellate Authority
  3. Appellate Tribunal
  4. High Court
  5. Supreme Court

Need for such Tribunal

  • Unburden judiciary: GST Appellate Tribunal will help resolve the rising number of disputes under the 68-month-old indirect tax regime that are now clogging High Courts and other judicial fora.
  • Improve efficiency of GST System: Overall, the establishment of the GST Appellate Tribunal is expected to improve the efficiency and effectiveness of the GST system in India.
  • Independent mechanism: The proposed Tribunal will provide an independent and efficient mechanism for resolving disputes related to GST.
  • Avoid tax evasion: It will help to expedite the resolution of disputes, reduce the burden on the judiciary, and promote greater certainty and predictability in the GST system.

Issues with present litigation

  • Compliance issues: The GST system is relatively new in India, having been implemented in 2017, and there have been several issues with compliance and interpretation of rules and regulations.
  • Complex adjudication hierarchy: The current dispute resolution mechanism involves multiple layers of adjudication, starting with the GST officer and as mentioned above.
  • Time-consuming process: This process can be time-consuming, costly, and burdensome for taxpayers, especially small and medium-sized enterprises.

Significance

  • The creation of these tribunals had been in the pipeline since the implementation of the GST regime on July 1, 2017.
  • The number of pending appeals by taxpayers related to central GST levies had surged to over 14,000 (June 2023).

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