A 4-member GST appellate tribunal likely in each state, says official

A 4-member appellate tribunal is proposed to be set up in each state to streamline and expedite the dispute resolution process with regard to Goods and Services Tax (GST), according to an official.

Each state appellate tribunal would have two technical members (one officer each from the centre and states) and two judicial members, the official told PTI.

A division bench comprising two members -- one technical and one judicial -- will decide the appeals brought before it.

As per the proposal, each state appellate tribunal will have two division benches and thus will be able to deal with more appeals, the official noted.

There will also be a national appellate tribunal, which would be set up in Delhi, and comprise one judicial member and one technical member.

The national appellate bench will mainly look into appeal cases on disputes between the department and assessee over the 'place of supply' under the GST regime. It, however, will not take up any appeal with regard to divergent rulings by state appellate tribunals, the official added.

"Comments from states have come in with respect to the constitution of appellate tribunal. There would be further discussion between the Central and state tax officers and thereafter amendments to GST law would be proposed for approval by Parliament," as per the official.

The official said discussion is ongoing with the states regarding setting up a selection committee for appointing judicial members in state benches. The judicial members will be selected from a panel of serving or retired High Court and District Court judges.

"A centralised mechanism for appointing judicial members would be advisable. A selection committee consisting of Supreme Court judges would be advisable. More discussion between centre and states is required on this," the official added.

The amendments would be brought in as part of the Finance Bill 2023 for Parliament approval. Thereafter, changes in state laws would be made.

"The whole process would take about 7-8 months for setting up benches in each state as well as a national appellate tribunal," the official said.

The 49th GST Council meeting last month accepted the report of a panel of state ministers on GST Appellate Tribunals with some modifications. It was decided that the changes required in GST law would be circulated to the states for their comments.

The council, chaired by Union Finance Minister and comprising state counterparts, had then authorised the Union Finance Minister to take the final view and incorporate required changes in the GST law in the Finance Bill.

Currently, taxpayers aggrieved with the ruling of tax authorities are required to move respective High Courts. The resolution process takes longer time as High Courts are already burdened with a backlog of cases and do not have a specialised bench to deal with GST cases.

Setting up of state and national level benches would pave the way for faster dispute resolution, the official said.

The proposed changes in the GST law will also have provisions for allowing larger states like Uttar Pradesh and Maharashtra to set up more benches. However, in such cases, the states will be required to seek the approval of the GST Council.