A long standing demand of the industry seems to be close to becoming a reality as sources indicated that the GST Council-nominated Group Of Ministers (GoM), which is headed by Haryana Deputy CM Dushyant Chautala, has submitted the final report on setting up of the Goods and Services Tax Appellate Tribunals (GSTAT).

The GoM report is likely to be adopted in the upcoming 48th GST Council meet scheduled on December 17.

Sources told CNBC-TV18 that the tribunals will hear appeals against orders passed by commissioners/appellate authority and would comprise a president, two judicial members, one technical member each from the Centre and state.

The sources added that the report proposes a single-member bench is likely to be authorised to hear cases of tax dispute below Rs 50 lakh, whereas for cases involving amounts more than Rs 50 lakh, would have to be heard by a double member bench.

“The government is aiming to set up these tribunals, which are likely to be spread across India, in the next three months, so that the litigation at various courts gets consolidated at one forum,” the sources added.

The proposal is to have a principal bench in New Delhi and similar benches at the state-level. The appellate body’s president is likely to be a retired judge from the Supreme Court or former chief justice of a high court, the sources said.

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Meanhwile, experts said this step is much awaited and in the right direction, but will have a few challenges. “The setting up of the tribunals will certainly help in expediting the adjudication process and it is expected that a lot of matters, which are before the high court, in absence of the tribunals, would now be remanded back once tribunals are operative”, said advocate Abhishek A Rastogi from Rastogi Chambers.

He added that in the absence of the tribunals, the tax payer could directly approach the high court without having to pay a pre-deposit of 20 percent. "However, mandatory pre-deposit will come into play with the formation of Tribunals,” he said.

Rastogi added that the GST is very dynamic and hence the experience of the members in indirect taxes would play an important role. "Accordingly, in case an option is given to the existing CESTAT members, the functioning could perhaps be enhanced. Another challenge would remain that there will be huge backlog of cases as GST reform has already been in place for more than five years," he said.

Meanwhile, Pratik Jain, a partner at PwC India, said that this is surely a long-awaited relief to the industry. "The only option for the industry till now was to go for a writ petition to the high courts, which are already burdened with huge backlog. In many instances, the high courts had told petitioners to wait for the formation of a tribunal. It remains to be seen as to whether the judicial and technical members can be appointed within three months," he said.

Sharing similar sentiments, a former senior government official closely associated with GST at North Block, said that three months to constitute a tribunal looks very optimistic. "First, the requisite amendment in law needs approval of the GST Council and then introduction of the same in Finance Bill 2023, assent by the President, formulation and rules, selection process, appointment, notifying effective date by all states in their respective legislation’s, etc is a lengthly process. In my opinion, it may take six to nine months going by past experience of filling up of vacancies in other tribunals,” the official said.

The GST Council will approve the final contours when it meets for the 48th time on December 17 virtually.

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First Published:Dec 8, 2022 8:22 PM IST