GST Appellate Tribunals to face tsunami of appeals worth Rs. 1 lakh crore

The Goods and Services Tax Appellate Tribunals have to face a tsunami of appeals worth Rs. 1 lakh crore.

According to the sources, the Government anticipates that the Appellate Tribunals will be operational by April 2024. It is known that once these Appellate Tribunals are established, both the government and the industry intend to reduce the litigation burden on the country’s High Courts.

On October 27, 2023, the government notified the creation of GST Appellate Tribunals.

The industry is expected to file a high number of appeals against adverse GST orders. However, the industry has asked the government to consider lowering the amount of pre-appeal deposit.

Further sources said that the industry has stated in a representation that a high pre-appeal deposit sum will harm many enterprises’ working capital.

Before filing an appeal, GST payers pay 30 % of the GST demand as a pre-appeal deposit. The maximum pre-appeal deposit in cases involving high-value CGST has been raised from 25 crore to 50 crore.

Similarly, in situations involving high-value IGST, the maximum pre-appeal deposit has been raised to Rs. 100 crore. In the first phase, the government intends to establish 32 GST Appellate Tribunal benches.

According to the sources, in the second phase, the government plans to double the number of state-level GST Appellate Tribunals to 62. Experts say the tribunals were long overdue and highly needed.

Najib shah, former chairman of the CBIC said that the absence of a GST Appellate Tribunal, even after 6 years of the GST law’s implementation, was a glaring gap in the GST administration.” The administration has cautiously begun the process of establishing the tribunal. The notification on the location of benches was released on September 14, with 31 benches to be placed up throughout several states. On October 25, the government published a notification outlining the President’s appointment, terms of duty, and member rules. This is an important step forward, and the process of selecting and filling the positions can now begin. Hopefully, the process will be completed soon, and the tribunals will be operational.

The establishment and operation of the tribunals will benefit taxpayers who have pending litigations before the tribunal. In circumstances of real tax problems, pre-deposit may become a burden. Because the tribunals will start with a lot of pendency, taxpayers will have to mention priority to get the matters listed.

The time limit for submitting appeals with the tribunals will begin on the day these tribunals start active. This order will benefit all taxpayers across the country.