Understanding the GST Appellate Tribunal Appeal Process

This article focuses on the process of appealing to the Goods and Services Tax Appellate Tribunal (GSTAT), building upon previous discussions regarding fundamental appeal concepts and appeals directed to the First Appellate Authority. In 2023, the Rajya Sabha passed legislation authorizing the creation of GST appellate tribunals, setting a minimum age of 50 for members and revising appointment conditions.

Several key decisions concerning the GSTAT were made during the 50th GST Council meeting:

• The Council deliberated on potential locations and schedules for establishing state benches of the appellate tribunal. The GST Appellate Tribunal became operational on August 1, 2023. Relevant rules will be enacted for the appointment of the President and members. State benches are planned for phased implementation, following the 50th GST Council meeting's recommendations.
• Manual appeal filing against orders related to TRAN-1/TRAN-2 forms, submitted by migrated taxpayers, was authorized by the GST Council.
• The introduction of manual appeal filing procedures under GST is planned by the authorities.

Appealing to the Goods and Services Tax Appellate Tribunal

The government intends to establish the Goods and Services Tax Appellate Tribunal, which will handle appeals against directives issued by either the Appellate Authority or the Revisional Authority.

Eligibility for Appealing to the GSTAT

Individuals dissatisfied with a determination from the First Appellate Authority or the Revisional Authority are eligible to file an appeal with the National Appellate Tribunal. This appeal must be submitted within three months of the decision date, accompanied by Form GST APL-05 and the requisite fees. The 53rd GST Council meeting suggested monetary thresholds for departmental appeals: Rs. 20 lakh for the GST Appellate Tribunal, Rs. 1 crore for High Courts, and Rs. 2 crore for the Supreme Court.

Appeal Filing Deadline for GSTAT: During its 53rd meeting on June 22, 2024, the GST Council proposed an amendment to Section 112, establishing a three-month period for filing appeals with the GST Appellate Tribunal. This period will commence from a government-notified date, anticipated by August 5, 2024.

Applicable Fees: Each appellant is required to submit:

• The entire sum stipulated in the original order that the appellant accepts (encompassing tax, interest, fines, fees, and penalties).
• Additionally, 20% of the contested tax amount. (The 53rd GST Council meeting proposed lowering this pre-deposit requirement for GSTAT appeals from 20%, with a cap of Rs. 50 crores under CGST and SGST, to 10%, with a maximum of Rs. 20 crores under both CGST and SGST).

Structure of the National Appellate Tribunal

The National Appellate Tribunal will be structured as follows:

• The National Bench, located in Delhi, will be presided over by a National President, supported by one technical member each from the Central and State governments.
• Regional Benches will comprise a Judicial Member, a Central Technical Member, and a State Technical Member.
• Each state will have a dedicated State Bench, led by a State President.
• Area Benches will operate under the State Benches.
• All State and Area Benches will include judicial and technical personnel (from CGST and SGST) as specified.
• The qualifications, eligibility criteria, and appointment procedures for the National President, Judicial, and CGST Members will adhere to the Act's provisions and the Council's recommendations.

Acceptance Criteria for Appeals

The Appellate Tribunal may decline to accept appeals if the disputed amount (concerning tax, input tax credit, fines, fees, or penalties) is less than Rs. 50,000. Should the committee determine that an order was improperly or illegally issued, it can instruct an officer to submit an application to the Appellate Tribunal within six months of the original appeal date, with a possible three-month extension.

Proposed Sunset Clauses for Sections 109 & 117: A sunset clause is proposed for pending anti-profiteering cases, with a decision to transfer their hearing from the CCI to the GSTAT's principal bench. The GST Council also suggested an April 1, 2025, sunset date for accepting new anti-profiteering applications.

Impact on the Benefitted Party

The party that previously received a favorable decision will be notified of an appeal filed with the Appellate Tribunal. This party then has 45 days from receiving the notice to submit a memorandum of cross-objections, with a potential extension of another 45 days for valid reasons.

Appellate Tribunal Verdicts

The Appellate Tribunal possesses the authority to uphold, alter, or revoke a decision, or it may send the case back to the First Appellate Authority or Revisional Authority for further review. Additionally, the tribunal can remand the case to the initial adjudicating authority, instructing a new decision based on any supplementary evidence.

The Appellate Tribunal is mandated to issue its ruling within one year from the appeal submission date. Copies of the final order will be provided to:

• The First Appellate Authority or Revisional Authority (the original adjudicating body)
• The appellant
• The jurisdictional Commissioner of Central Goods and Services Tax (CGST)
• The jurisdictional Commissioner of State Goods and Services Tax (SGST)

Adjournment Policy

The Appellate Tribunal can grant a maximum of three adjournments for an appeal hearing. All reasons for these adjournments must be documented in writing.

Tribunal's Authority to Amend Orders

The Appellate Tribunal is authorized to amend its own orders to correct obvious errors within three months of the order's date. Such mistakes might be identified by the Tribunal itself or brought to its attention by the GST Commissioner or another party involved in the appeal. Any modification that would increase tax liability or reduce a refund or input tax credit will only occur after the affected party has been given a fair chance to be heard. If a court or tribunal stays an order, the duration of that stay will not count towards the one-year decision period.

Decision-Making Process of the Appellate Tribunal

The Appellate Tribunal's powers and functions are exercised through its Benches. Each State and Area Bench will typically consist of:

• One Judicial Member
• One CGST Member (Technical)
• One SGST Member (Technical)
• The State President

A single member is permitted to resolve cases where the disputed amount is less than Rs. 5 lakhs.

Handling Disagreements within a Bench

Decisions are determined by a majority vote. If members are equally divided, the matter will be escalated to the National President or the State President. The President will then refer the case to other Benches, and the final decision will be based on the combined majority vote of both the original and referred Benches.

Powers of the Tribunal

The Appellate Tribunal is vested with the same powers as a court operating under the Code of Civil Procedure, 1908, for handling cases. It is considered a Civil Court by deeming fiction.

Interest on Refunded Fees

Should an appellant's fees be subject to a refund based on an order from the First Appellate Authority or the Appellate Tribunal, and if this refund is not processed within 60 days, interest will accrue. This interest will be calculated from the original fee payment date until the refund date, at a rate not exceeding 18%. Parties unsatisfied with a National Appellate Tribunal decision may further appeal to the High Court and ultimately the Supreme Court.