Lok Sabha approves setting up of GST Appellate Tribunal to solve disputes

Lok Sabha on Friday cleared changes in the Finance Bill to pave the way for setting up of an appellate tribunal for resolution of disputes under GST.

Currently, taxpayers are filing writ petitions before high courts in the absence of the appellate tribunal.

As per the amendments proposed in the Finance Bill 2023, which was passed by Lok Sabha on Friday, benches of the GST Appellate Tribunal would be set up in every state while there will be a principal bench in Delhi which will hear appeals related to 'place of supply'.

Even after more than five years of implementation of the Goods and Services Tax (GST), the appellate tribunal has not been set up. As a result, unresolved legal matters under GST have accumulated.

Nangia Andersen India's Tanushree Roy, Director- Indirect Tax, said establishment of the appellate tribunal would result in lower burden on high courts, Supreme Court and at the same time, would also provide taxpayers the much needed reprieve.

"This is certainly a welcome and a positive move, ending the industry's long wait for establishment of the GST Appellate Tribunal," Roy said.

EY Tax Partner Saurabh Agarwal said the amendment made in Section 109 of the CGST Act would help the government in setting up of the GST tribunal in a time-bound manner.

It would also enable the principal bench to take certain important decisions such as distribution of cases amongst the state benches, referring of case to other members if there is a difference in views within the same bench or otherwise. These would help in expediting the decision-making process, Agarwal added.

"Further, on the vexed issue with respect to place of supply, the power to hear the appeal should now vest with the principal bench which would likely aid in better decision making," Agarwal said.

Abhishek Jain, Partner, Indirect Tax at KPMG in India, said it will bring to an end the long wait by the industry and help streamline pending litigations.

Last month, the 49th GST Council meeting accepted the report of a panel of state ministers on appellate tribunals with some modifications.

Currently, taxpayers aggrieved with ruling of tax authorities are required to move high courts. The resolution process takes longer time as high courts are already burdened with 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.