New bills to replace law on customs, excise, age limits of GSTAT members

Finance Minister Nirmala Sitharaman on Wednesday introduced two Bills in Parliament to immediately give effect to Customs and excise duty changes announced in the Budget and raise the age limits for president and members of the goods and services tax appellate tribunals (GSTATs).

The Provisional Collection of Taxes Bill, 2023, which seeks to replace the pre-Independence era Provisional Collection of Taxes Act, 1931, is aimed at curbing speculative activities, following changes in Customs and excise duties in the Budget.

The changes in rates of income and corporate taxes, incorporated in the Budget announced on February 1, are effective from April 1 or a notified date. Most of the changes in Customs and excise duty rates become effective from midnight.
 

Congress leader Adhir Ranjan Chowdhury opposed the Bill, saying it violates Article 265, which provides that no tax could be levied or collected without the authority of law. There was no Article 265 when the earlier Act was enacted, he said.
 

The other Bill — The Central Goods and Services Tax (Second Amendment) Bill, 2023 — seeks to raise the age limit for president and members of the GSTAT.
 

The Bill seeks to cap the age limit for president and members of the GST appellate tribunals at 70 years and 67 years, respectively. This is higher than the 67 years and 65 years, specified earlier.
 

The president and members of the GSTAT would be eligible for re-appointment for a period of two years subject to the age limit of 70 and 67, respectively, according to the amended Bill.
 

The Bill also gives one more option for qualification for a judicial member — he/she should be an advocate for 10 years with substantial experience in litigation, in matters relating to indirect taxes.
 

Sandeep Sehgal, partner tax at AKM Global, said the Bill represents a strategic move to strengthen India's tax adjudication system.

A finance ministry official had last week said that operationalising GSTATs would take about 4-5 months and efforts are also being made to identify infrastructure, following which the selection process of members will start.
 

In September, the finance ministry notified 31 Benches of the GSTAT, which will be set up in 28 states and eight UTs. Setting up state-level Benches of GSTAT would help businesses by way of faster dispute resolution.

Currently, taxpayers aggrieved with the ruling of tax authorities, including first-level appellate body of officers, are required to move the respective high courts.

The resolution process takes longer as high courts are already burdened with a backlog of cases and do not have a specialised Bench to deal with GST cases.