Longer wait for GST tribunals with Council yet to clear proposals
New Delhi, Jan 19, 2023
Council was de-criminalization of GST laws along with an increase in the monetary threshold for initiating prosecution from ₹ 1 crore to ₹2 crore by amending Section 132 of the CGST Act.
Businesses may have to wait longer for quicker resolution of Goods and Services Tax (GST)-related disputes under the proposed appellate tribunals, as the Finance Bill 2023 is expected to skip crucial amendments needed in this regard.
The plan to set up GST appellate tribunals (GSTAT) across the country missed a crucial opportunity with the federal tax body, the GST Council, not clearing the proposals at its last meeting on 17 December, a person informed about the Centre-state discussions said.
“Amendments to Central GST (CGST) Act and Integrated GST (IGST) Act are done through Finance Acts brought out every year as part of the annual budget exercise and missing this year’s budget could mean that these amendments may have to wait for another year, unless an ordinance is promulgated," said the person.
However, an ordinance does not appear likely at this juncture, the person added.
The council was convened in December with the idea of getting this and other important amendments cleared, the person said. However, it took up only eight of the 15 agenda items on the table at its last meeting.
Union finance minister and chairperson of the council Nirmala Sitharaman had said at a briefing at the end of the meeting that the issue of tribunals will be taken up at the Council’s next meeting, which may be an in-person meeting. A date for the next meeting is yet to be fixed.
One important item cleared by the Council was de-criminalization of GST laws along with an increase in the monetary threshold for initiating prosecution from ₹ 1 crore to ₹2 crore by amending Section 132 of the CGST Act.
This is expected to make it to the Finance Bill, 2023, giving relief to businesses.
“In the absence of GSTAT, a lot of assessees now approach high courts to seek remedies including in refund cases, which adds up to the burden of cases on high courts. The urgency of having GSTAT is not lost on anyone and it is surprising that after five years of the indirect tax reform, we do not have the appellate tribunal. I hope this does not get delayed further," said Shashi Mathews, partner, tax at law firm IndusLaw.
Experts said that not many high courts have expertise on GST and it will make sense to have the tribunals across the country.
GST appellate tribunals will also deal with Centre-state disputes.
The Council has to take a call on whether there should be one GST appellate tribunal per state or whether one per region, and how many members should be there from the Centre and states.
There would be four members in a tribunal including two technical members, a judicial member and the president of the tribunal. The Council has to decide what would be an equitable distribution of members between central and state governments.
Experts also hope for an amnesty scheme for customs duty-related disputes in the forthcoming Union budget.