FM moves legislation to set up GST Appellate Tribunals ‘at the earliest’

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Finance Minister Nirmala Sitharaman speaks in the Lok Sabha during the Winter session of Parliament, in New Delhi, on December 13, 2023.

Finance Minister Nirmala Sitharaman speaks in the Lok Sabha during the Winter session of Parliament, in New Delhi, on December 13, 2023.
| Photo Credit: PTI

Setting the stage to clear the final hurdle holding up the formation of the GST Appellate Tribunals, Finance Minister Nirmala Sitharaman on December 13 introduced amendments to the Central Goods and Services Tax Act of 2017 in the Lok Sabha to align its provisions with the Tribunal Reforms Act of 2021. 

The proposed changes which relate to the eligibility criteria for members and the President of the much-awaited tribunals, once approved by Parliament, will facilitate the initiation of “the administrative process for operationalisation of the Goods and Services Tax Appellate Tribunals at the earliest”, the Minister stated in the objects and reasons for the Central GST (Second Amendment) Bill, 2023. 

The GST regime, launched in July 2017, had provisions for setting up the Appellate tribunals as the second appellate authority for hearing appeals against the orders passed by the Appellate Authority under the Central and State GST laws. 

“Non-constitution of the Goods and Services Tax Appellate Tribunals is denying the taxpayers of second appellate remedy and consequently the taxpayers are seeking relief directly from the High Court, thereby burdening the High Courts,” Ms. Sitharaman said. As of October 31, the number of pending appeals under central GST laws had risen to nearly 15,000, reflecting a 25% rise over the pending cases at the end of 2022-23. 

While the Central GST law was amended earlier in July to enable the creation of the Central GST appellate tribunals, during the process of operationalisation, it was observed that certain provisions were not aligned with the Tribunal Reforms law. 

In early October, the GST Council chaired by Ms. Sitharaman had recommended fresh amendments in the conditions of appointment of President and Member of the proposed GST Appellate Tribunals with regards to eligibility and age criteria. 

On December 4, responding to MPs’ queries about the status of the appellate tribunals, Minister of State for Finance Pankaj Chaudhary had said State benches of the Tribunal have been constituted through a notification in September.

Terming the development as a positive sign that may lead to quicker formation of the tribunals, Sanjay Chhabria, director (indirect tax) at Nexdigm, said the key change being proposed is to widen the eligibility criteria for members, where even lawyers with over 10 years of experience in indirect tax litigation can now be a Tribunal member.

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