GST Tribunal blueprint likely to be approved by GST Council this month

The much-anticipated GST Appellate Tribunal, which will handle tax disputes and streamline resolution, is expected to be established by the Goods and Services Tax (GST) Council, which is scheduled to meet in the third or fourth week of June.

“The GST Council meeting is where the final blueprint, primarily the operational portion, is anticipated to be presented for approval. The tribunal will now be able to function both at the federal and state levels, according to a senior government official, who anticipates the tribunal will be operational by November.

By changing the GST statute during the budget session, the foundation was laid. According to the official, the final guidelines will be published and adjustments to state legislation would be made.

Another official stated, “Work includes setting up Benches in each state as well as having a national appellate tribunal.”

The GST Council decided to present a draught bill on the tribunal at its meeting on February 18 after extensive discussion and consultation.

The law stipulates that the tribunal will have a “Principal Bench” comprising a president, a judicial member, a technical member (state), and a technical member (central) in New Delhi.

State Benches will also be included, according to the population of the relevant states. States with populations under 20 million can only have one Bench, while states with populations between 20 and 50 million can have two.

The national appellate bench will focus on disagreements over the “place of supply” between tax assessors and assessees. However, it won’t consider any appeals related to conflicting decisions made by state appellate tribunals.

With certain modifications, the GST Council had accepted the tribunal report from a group of state ministers. It was resolved to send the necessary revisions to the states for feedback on the GST bill. Currently, taxpayers who are unhappy with a tax authority’s decision must file a high court appeal. Due to the lack of a specialised bench in high courts to handle GST issues, the resolution procedure takes a long time. The GST Council may also decide to impose taxes on racing, casinos, and online gaming.

Following a recent ruling by the Karnataka High Court, which invalidated a Rs. 21,000 crore GST notice to an online gaming company named Gameskraft, the situation assumes relevance.

A 28 percent GST on online gambling has been decided upon by a group of state ministers assembled to study the taxation problem. The panel resolved to refer all ideas to the GST Council in December 2022 for a final decision, but there was no agreement on whether the tax should be applied to only the fees imposed by the portal or to the total consideration, including the bet amount received from the participants. The GST Council has not yet discussed the issue. According to sources, the stakeholders involved remain undecided, therefore the issue might not be settled at the future conference.

In the meantime, whether online games would be regarded as skill or chance games was the subject of the high court hearings. GST is 18% for the former whereas it is 28% for the latter.