“Dive into the analysis of the 52nd GST Council’s Amnesty Scheme for Time-Barred Appeals, addressing limitations and shortcomings. Explore the scope, timeline, grounds, pre-deposit requirements, and the unique provision for rehearing appeals, offering insights into this significant development for taxpayers in the GST landscape.”
Amnesty Scheme for Time barred Appeal-52nd GST Council recommendation- An analysis of Limitations & Shortcomings
The 52nd GST Council meeting brought forth a significant recommendation—an Amnesty Scheme for filing appeals against demand orders in cases where the appeal could not be filed within the allowable time period. While this proposal offers relief to many taxpayers, it’s essential to analyze its limitations and shortcomings to better understand its implications.
i) Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period:
Amnesty Scheme for filing of appeals against demand orders in cases where appeal could not be filed within the allowable time period – A major relief in 52nd GST Council meeting:
The Council has recommended providing an amnesty scheme through a special procedure under section 148 of CGST Act, 2017 for taxable persons, who could not file an appeal under section 107 of the said Act, against the demand order under section 73 or 74 of CGST Act, 2017 passed on or before the 31st day of March, 2023, or whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in sub-section (1) of section 107. In all such cases, filing of appeal by the taxpayers will be allowed against such orders upto 31st January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger. This will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
Let’s dissect it to understand the limitations too better!
1. Limited Scope: ‘For taxable persons, who could not file an appeal under section 107 of the said Act, against the demand order u/s 73 or 74’
> While Sec 107 provides first level appeal remedy for ‘Any person aggrieved by any decision or order passed under the GST Act’, this amnesty scheme is limited to sec 73/74 orders. Eg. Goods detention cases u/s 129, refund orders issued in RFD06, etc cannot be under this amnesty scheme.
> Also, the words ‘who could not file an appeal’ seems to be linked with any inability associated with reasons for not having filed appeal. Let us wait for the actual scheme notification and see if it is applicable for all cases and be read as ‘who failed to make an appeal’!
2. Timeline: The recommendation covers orders passed on or before March 31, 2023. This raises concerns for orders issued after this date, as the time limits for filing appeals might have already expired by the time the amnesty scheme comes into effect. Ensuring fairness and uniformity may require extending the scheme’s applicability to later orders.
3. Limited Grounds: ‘or whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in sub-section (1) of section 107’.
> The recommendation of GST council has not specifically covered other scenarios like where the demand order itself has been admitted and paid voluntarily by the taxpayer, may or may not be due to expiry of time limit to appeal without even attempting to file an appeal. Hopefully the relief should be broader and larger in the actual scheme!
4. Pre-Deposit Requirement: In all such cases, filing of appeal by the taxpayers will be allowed against such orders upto 31 January 2024, subject to the condition of payment of an amount of pre-deposit of 12.5% of the tax under dispute, out of which at least 20% (i.e. 2.5% of the tax under dispute) should be debited from Electronic Cash Ledger. This will facilitate a large number of taxpayers, who could not file appeal in the past within the specified time period.
5. Rehearing Appeals: One notable aspect of the recommendation is the provision allowing the filing of appeals by taxpayers whose appeals were previously rejected. This, however, raises questions about the legal empowerment of appellate authorities to rehear cases they initially denied. While beneficial to taxpayers, it appears unusual in the legal context.
6. Tribunal and GSTAT: Given that the Goods and Services Tax Appellate Tribunal (GSTAT) is still in the process of being set up and made operational, there’s a potential opportunity for the GST Council to consider a one-time mechanism for appeals with GSTAT. This could provide relief to taxpayers regardless of the timely requirement to make pre-deposits or the voluntary payment of first appeal orders against taxpayers and recovery proceedings.
Most of the amnesty schemes issued so far, starting from the late fees waiver, have only extended arms for those who taxpayers who waited with lethargy rather than being fair to all taxpayers including proactive ones.
Conclusion: The Amnesty Scheme recommended in the 52nd GST Council meeting is a significant development for taxpayers facing time-barred appeals. While it offers relief to many, it also comes with limitations and shortcomings that need to be addressed to ensure fairness and inclusivity. Expanding the scope, considering cases beyond time limits, and reevaluating the pre-deposit requirement could make the scheme more equitable. Additionally, exploring avenues for appeals with GSTAT and reconciling the legal intricacies of rehearing denied appeals will be essential in making this scheme a game-changer in the realm of GST litigations. Taxpayers eagerly await this potential turning point in their tax disputes within the early era of GSTlitigations!.
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