GST Appeals – Amnesty Scheme

The realm of GST appeals is intricately governed by the CGST Act, 2017, ensuring a structured approach to dispute resolution. This article delves into the procedural aspects of GST appeals, with a specific focus on the recent Amnesty Scheme introduced by the GST Council.

The GST Act provides that where a proper officer under one Act (say, CGST) has passed an order, any appeal/review/ revision/rectification against the said order will lie only with the proper officers of that Act only (CGST Act). So also if any order is passed by the proper officer of SGST, any appeal/review /revision /rectification will lie with the proper officer of SGST only.

GST Appeal to Appellate Authority

Chapter XVII of CGST Act, 2017 (sections 107 to 121) contains provisions for appeals and revision. Section 107 provides for appeals to appellate authority. Accordingly,

(a) Who can file appeal – Any person aggrieved or Department on direction of commissioner

(b) Order appealed against – Any decision or order passed by an adjudicating authority under the Act

(c) Adjournments – A maximum of three adjournments may be allowed.

(d) Time limit to file appeal – 3 months from date of communication of order; delay of up to one (1) month condonable; 6 months in case of Departmental Appeal

(e) Pre-deposit for filing of appeal – 10% of amount in dispute; 25% in case of penalty under section 129(3) of CGST Act, 2017; 12.5% under special Amnesty Scheme with differential 2.5% to be paid from electronic cash ledger.

(e) Number of adjournments allowed in hearing – Up to 3 adjournments can be granted for hearing the appeal after recording reasons in writing

(f) Time limit to decide appeal –Appeal may be decided within a period of one year from the date of filing.

(g) Whether remand allowed – No remand to adjudicating authority is allowed.

GST Appellate Authority [Section 2(8)]

‘Appellate Authority’ has been defined under section 2(8) of CGST Act, 2017 to mean:

(a) Any authority duly appointed or authorized

(b) Such authority should be authorized to hear the appeals

(c) Such appeals should be as referred to in section 107 of CGST Act, 2017

The appellate authority in terms of section 2(8) read with 107 of CGST Act, 2017 shall carry out the following functions / obligations:

a) To receive the appeal

b) To hear and adjudicate the dispute and issues under the appeal

c) To condone the delay in terms of statutory provisions

d) To give an opportunity to the appellant of being heard

e) To allow adjournments on a reasonable cause being shown

f) To issue show cause notice where he is of opinion that tax has not been paid or short paid or refund/ input tax credit is wrongly taken.

g) To decide the appeal to the extent possible within a period of one year of filing of appeal

h) To issue the appellate order with copies to all concerns including summary of order as required under the relevant rules.

Time limit for filing GST Appeal [Section 107(1), (2)]

Every appeal to appellate authority shall be filed within three months from the date on which the decision or order sought to be appealed against is communicated to the person preferring the appeal. The period of three months shall be reckoned from date of communication of order and not from the date of issuance or dispatch of order.

In case of an appeal filed by the department on the basis of the directions by the Commissioner shall have to be filed within 6 months from date of communication of the decision or order.

Condonation of Delay (COD) [Section 107(4)]

The appellate authority may, if satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of one month.

With the extension of period by one more month, appellant gets four months’ time but the extension is at the discretion of the appellate authority based on sufficient cause being shown to his satisfaction.

As per section 107(4) of the CGST Act, 2017, Appellate Authority has powers to condone the delay beyond the period of 3 months or 6 months, up to a period of 1 month where sufficient cause for the delay is shown.

The appellant/applicant must have sufficient cause for not preferring the appeal or making the application in time. As such, the appellate authority considers each such case on merits keeping in view sufficient cause.

In various judicial pronouncements, it has been held that sufficient cause would depend upon facts and circumstances of each case and may include reasons such as death in family, long illness, loss of documents, non-receipt of order, improper guidance, change of consultant, shifting of office etc.

Additional pre-deposit under GST Amnesty Scheme

The GST Council in its 52nd Council meeting held on 07.10.2023 had recommended to provide an amnesty scheme to allow the filing of appeal against all the demand orders passed till March 31, 2023 by January 31, 2024. This would be allowed upon making an additional pre-deposit of 2.5% from Electronic Credit Ledger (ECRL). Hence, the appeal would be filed upon making a pre-deposit of 12.5% out of which 2.5% would be required to be paid from ECL.

It may be noted that such additional pre-deposit of 2.5% shall be made only in cash via electronic cash ledger (ECL) and electronic credit ledger (ECRL) can not be used for the said purpose.

GST Council Recommendation on GST Amnesty Scheme

52^nd meeting of GST Council held on 07.10.2023 recommended an Amnesty Scheme. Accordingly, the Council 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 107of 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 up to 31 January 2024, subject to the condition of payment of an amount of pre-deposit of12.5% 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. This is expected to benefit all those taxpayers who could not file appeals in time provided in law or where delay in filing of appeal was not condoned.

Amnesty Scheme for GST Appeals

CBIC has since notified an ‘Amnesty Scheme’ for belated filing of appeals under section 107 of CGST Act, 2017, as recommended by GST Council in its 52^nd meeting held on 07.10.2023, vide Notification No. 53/2023-Central Tax dated 02.11.2023

• This Amnesty Scheme is for those taxable persons who could not file appeal under section 107 against orders issued up to 31.03.2023 by proper officer under section 73 or 74 of CGST Rules, 2017.
• Amnesty scheme is applicable only for first appeal to Appellate Authority under section 107 of CGST Act, 2017 and not for any other appeal or appeal before Appellate Tribunal.
• Appeals under Amnesty Scheme are time specific and only those orders which have been issued on or before 31^st March, 2023 will be covered.
• Orders to be eligible for scheme must be issued only under section 73 or 74 of CGST Act, 2017.
• It the order is issued on before 31^st March, 2023 but received by taxable person after 31.03.2023, then such orders may also be eligible for Amnesty Scheme
• Those taxable persons who had filed the returns but got rejected solely on the ground of time limitation specified in section 107(1) are also eligible under the scheme.
• In such cases, since 10% of pre-deposit would have already been done, only balance differential of 5% shall be payable in cash.
• The scheme prescribes a special procedure for filing appeals by taxpayer.
• Amnesty Scheme shall not apply to revision as it applies only to taxable person.
• Any appeal filed under section 107 and pending before Appellate Authority before 02.11.2023 (date of Notification No. 53/2023-CT) shall be deemed to have been filed under Amnesty Scheme if pre-deposit condition as per notification are complied with.
• Appeal shall be filed in Form GST APL-01 in terms of section 107(1) on or before 31^st January, 2024.
• Appeal can not be filed unless the appellant has paid:

 (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to twelve and a half per cent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed, out of which at least twenty percent should have been paid by debiting from the Electronic Cash Ledger.

• Electronic Credit Ledger cannot be used for payment of differential 2.5% deposit and it has to be deposited by way of cash.
• Appeals under the scheme shall be admissible only where demand is of tax i.e., where dispute is only of interest, penalty or cancellation of registration etc. scheme can not be availed.
• Till the appeal is disposed of, no refund shall be granted on any account.
• CGST Rules under Chapter XIII of CGST Rules, 2017 (i.e., Rules 108 to 116) shall apply mutatis mutandis to appeals to be filed under the amnesty scheme.

Conclusion: In conclusion, understanding the intricacies of GST appeals, the role of the Appellate Authority, and the recent Amnesty Scheme is crucial for businesses navigating the complex terrain of taxation. The Amnesty Scheme, a recent addition, offers relief to those unable to file appeals within stipulated timelines, providing a pragmatic approach to dispute resolution in the GST landscape. Stay informed to ensure compliance and take advantage of the available avenues for dispute resolution.