GST: 210 Cr Allocated for Goods and Services Tax Appellate Tribunal

Here in this article there is mentioned the response of the Government of India to Lok Sabha Unstarred Question No. 158 as asked by Shri Manish Tewari on July 21, 2025. Below are the asked questions:

“Will the Minister of FINANCE be pleased to state:

(a) The total number of Goods and Services Tax Appellate Tribunal (GSTAT) benches, including Principal and State Benches, notified for each State and Union Territory along with their proposed locations.

(b) The total number of fully operational GSTAT benches, including Principal and State Benches, in the country, State/UT-wise.

(c) The details of the budget allocated, funds released and utilised so far for the establishment and operationalisation of GSTAT benches, State/UT-wise.

(d) The reasons for the delay in making the GSTAT benches operational despite the Central Goods and Services Tax Act, 2017 came into effect in 2017; and

(e) The details of interim measures being adopted to handle pending GST disputes due to the non-availability of an appellate forum under GST?”

Below is the response of the Government of India to Lok Sabha Unstarred Question No. 158 regarding the Goods and Services Tax Appellate Tribunal (GSTAT), asked by Shri Manish Tewari on July 21, 2025:

(a) The government has planned 31 State Benches spread across 45 different locations in India. Plus, there will be one Principal Bench located in New Delhi. These benches were officially notified by the government through a notification (S.O. 5063(E)) dated November 26, 2024, and have been updated as needed.

(b) As of now, none of the GSTAT benches, neither the state benches nor the principal bench, are fully operational. This means no GST tribunal is functioning yet, anywhere in the country.

(c) The total budget allocated for setting up and running GSTAT for the financial year 2025-26 is Rs. 210.05 crore (i.e., Rs. 210,04,70,000). Out of this, only around Rs 3.06 crore (Rs 3,05,58,376) has been utilised so far. This indicates that the process is still in very early stages; most of the funds haven’t yet been spent, likely because appointments and infrastructure are still being worked on.

(d) There are multiple legal and procedural reasons for this delay, explained step-by-step below:

1. Legal challenges in 2018-2019:

The original sections 109 and 110 of the CGST Act (which dealt with how the tribunal would be formed and who would be its members) were challenged in court.

• In the Revenue Bar Association vs. Union of India, the Madras High Court in September 2019 struck down those sections because they were not constitutionally valid.

2. Tribunal Reforms and Further Legal Issues:

After that, the central government tried to make tribunal-related rules more uniform (covering things like tenure, salary, and appointments). These rules were made applicable across around 30 different tribunals, including GSTAT.

• However, the Supreme Court struck down these rules too, saying they didn’t meet judicial independence standards.

3. New Rules Issued in 2020 and Rejected Again:

• The government tried again with new rules in 2020, called:

“Tribunal, Appellate Tribunal and Other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020”.

• But these were also challenged in the Supreme Court, which again asked for further changes.

4. Tribunal Reforms Act, 2021:

• Based on the court’s direction, the Tribunal Reforms Act, 2021 was passed to fix the issues and bring everything in line.

5. GST Council Steps In (2023):

• A Group of Ministers (GoM) was formed to examine how GSTAT should be set up.
• In its 49th meeting on 18th Feb 2023, the GST Council recommended that GSTAT should finally be constituted.

6. Legal Amendments in 2023:

• Following the Council’s recommendation, the Finance Act 2023 amended Sections 109 and 110 of the CGST Act to fix earlier flaws.

7. Further Amendments in December 2023:

• On 28th December 2023, more changes were made via the CGST (Second Amendment) Act 2023 to bring everything in line with the Tribunal Reforms Act.

8. Appointments and Setup Process have Started Now:

• After all these changes, the actual work of appointing members, hiring staff, and setting up the infrastructure for GSTAT has finally started.

(e) While GSTAT is still not functioning, the government has made some temporary legal changes and amnesty schemes to help taxpayers:

1. Input Tax Credit (ITC) Relief-Section 16(5):

A new sub-section 16(5) was added in 2024 (with retrospective effect from 1st July 2017).

• This allows taxpayers to claim input tax credit (ITC) for FY 2017-18 to FY 2020-21, even if claimed late (up to 30th Nov 2021 in GSTR-3B).
• This helps those who couldn’t claim ITC due to delays.

2. Relaxation in Appeal Fees (Pre-Deposit Reductions):

• For appeals before GST authorities, the maximum pre-deposit has been reduced from Rs. 25 crore to Rs. 20 crore (each for CGST and SGST).
• For appeals before the GSTAT, the pre-deposit has been reduced from 20% (max Rs. 50 crore) to 10% (max Rs. 20 crore).
• This is done to help businesses with cash flow and working capital.

3. Amnesty Scheme-Section 128A:

• A new section 128A was added to launch an amnesty scheme.
• For tax demand notices under Section 73 for FY 2017-18 to 2019-20, if taxpayers pay the full tax amount by 31st March 2025, then interest and penalties can be waived.