Arjuna (Fictional Character): Krishna, I have been hearing a lot about the GST Appellate Tribunal (GSTAT) since long and the challenges faced by taxpayers regarding appeals. Can you shed some light on why this has become such a concern?
Krishna (Fictional Character): Yes, Arjuna, the implementation of GST has been harmed by several disputes, especially concerning the rates, refunds, and the appeals process, etc. Since the inception of GST, taxpayers have been facing difficulties in accessing a proper forum to resolve these disputes. Currently, when a taxpayer is dissatisfied with the first appeal order, they have to approach directly to the High Courts for resolving their dispute as the tribunal is not yet set up. However, many cannot afford due to the costs and time involved. This has resulted in unnecessary delays and blocked funds, causing significant stress for the taxpayers.
Arjuna (Fictional Character): So, Krishna, what has been done to address this issue? Is there any hope for a better resolution?
Krishna (Fictional Character): Arjuna, the provision related to GST Appellate Tribunal has been issued since the introduction of GST under section 109 of the Central Goods and Services Tax Act, 2017, but it has not been operational until now due to which taxpayers go to court. However, as we discussed all taxpayers cannot afford to go to court, they can file Annexure I (Declaration regarding proposed appeal before appellate tribunal) against the order issued by first appeal authority in which taxpayer submit that they will file appeal to tribunal within prescribed time from the date of constitution of Tribunal. The annexure is accepted and stay on recovery is granted only after depositing the 10% of disputed amount demanded in order. But again here the problem arise is that this amount also get blocked without any resolution of dispute until the tribunal’s constitution is finalized, which is currently causing unnecessary financial strain and delay in resolution for taxpayers.
But Arjuna, On 24th April 2025, the Ministry of Finance issued a notification outlining the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025. This is a significant step toward the functioning of the GSTAT. The rules that have been issued provide a procedural framework for filing appeal to Tribunal. This notification is a ray of hope that soon the GST Tribunal can be set up.
Arjuna (Fictional Character): That’s great Krishna, what exactly do these new rules entail, and how will they help the taxpayers?
Krishna (Fictional Character): The new rules establish clear guidelines for the filing of appeals to the GSTAT. It specifies that taxpayers can file their appeals electronically on the GSTAT portal, which will streamline the process and make it more accessible. Unfortunately, the GSTAT portal is also not yet functional, which has caused delays in the process. However, the fact that the rules have been issued indicates that the government is taking necessary steps to make the tribunal operational soon.
Arjuna (Fictional Character): So, while the rules are in place, what’s the current situation with the tribunals themselves?
Krishna (Fictional Character): Arjuna, although the rules have been issued, the setup of the benches of the GST Appellate Tribunal is still pending.
On 31st July 2024 the ministry of finance issued a notification and hereby establishes the Goods and Services Tax Appellate Tribunal (GSTAT), with effect from the 1st day of September 2023, constitutes principal bench at Delhi and various state benches in the states specified in the said notification. These benches which are crucial for taxpayers have yet been setup.
The government has finalized the locations and number of benches but further delaying the process of setting up the same. But the issuance of these rules is a positive sign that the GSTAT is on its way to becoming operational, and the government is committed to resolving these issues.
Arjuna (Fictional Character): Krishna, this sounds promising, but what can taxpayers do in the meantime?
Krishna (Fictional Character): Until the GSTAT is fully operational, Arjuna, taxpayers must continue to navigate the current appeals process. Many taxpayers have already filed the Annexure I. So, taxpayers can file the same so that the stay is automatically granted. Taxpayers should stay updated on the formation of the benches and monitor the functioning of the GSTAT portal.
It’s also essential for taxpayers to seek professional advice to ensure that their appeals are in compliance with the newly issued rules once the tribunal becomes active. In the meantime, the GST Council’s efforts toward setting up the GSTAT will hopefully reduce the burden on taxpayers.
Arjuna (Fictional Character): Krishna, what can we learn from this?
Krishna (Fictional Character): From this, Arjuna, we must understand the importance of perseverance and patience in resolving legal disputes. The GST system has undoubtedly been challenging for taxpayers, but the government is taking steps to improve the situation. The key takeaway is that the introduction of the GST Appellate Tribunal will be a game-changer, providing taxpayers with an affordable and efficient mechanism to resolve disputes. For now, we must remain hopeful that the tribunal will soon function, bringing much-needed relief to the taxpayers.
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