GST Council adopts panel's report on setting up tribunals with modifications; analysts see this as a positive development

Union Finance Minister Nirmala Sitharaman on Saturday said the GST Council adopted the report of the Group of Ministers on GST Appellate Tribunal with certain modifications, and the final draft amendments will be circulated to state finance ministers for their comments.

The GoM on Goods and Services Tax Appellate Tribunals (GSTATs) was set up in July last year under the chairmanship of Haryana deputy chief minister Dushyant Chautala.

The panel has suggested that the tribunals should consist of two judicial members, and one technical member each from the Centre and states, besides a retired Supreme Court judge as president.

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The GoM report on the establishment of the GST Appellate Tribunal has been accepted with slight modifications in the language that will be shared with States on Sunday and following which a final draft of the Tribunal's setting up will be worked out, Sitharaman told reporters after chairing the 49th meeting of the GST Council.

She also informed that the Council has authorised the chairperson to take the final view and incorporate it in the Finance Bill, since there is not much time for the Council to meet again.

Commenting on the proposal, Abhishek Jain, Tax Partner, KPMG said a major development is an agreement on the GoM report on setting up of GST tribunal at the centre and state level.

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"This is a positive development and the industry players would hope that their long wait for GST Tribunal will soon be over," he said.

Shilpa Dhobale, Head, Product and Strategy IRISGST, at regtech company IRIS said as the government ramps up audits and analytics on tax returns, discrepancies in tax liabilities are being identified and continuously tracked, resulting in taxpayers receiving notices.

"The much-awaited GSTAT is expected to help resolve these matters faster. The establishment of GSTAT is expected to bring relief to businesses that have long awaited a quick and efficient process for resolving GST disputes," she said.

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Mahesh Jaising, Partner, Leader, Indirect Tax, Deloitte India said while the setting up of tribunals has seen significant delays, the formula for the number of members seems interesting and with equal representation by Centre and State, "we seem to be moving in the right direction and these should become a reality soon".

AMRG & Associates Senior Partner Rajat Mohan said that finally, after a lag of more than 2,000 days, the Council has given in-principal approval to the appellate tribunals with certain modifications. It is expected that new provisions could be pushed through Budget 2023 itself.

In the long run, this decision will fast-track cases struck in the pipeline and lower the judiciary's burden, Mohan said.

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Charanya Lakshmikumaran, Partner, Lakshmikumaran & Sridharan Attorney said the GoM recommendations for the constitution of the Appellate Tribunal have moved in a positive direction.

"We hope and look forward to the draft bill getting finalized in the coming weeks," Lakshmikumaran said.

The GST Council also took on board a GoM report to plug the leakages and improve the revenue collection from the commodities like pan masala, gutkha, chewing tobacco.

Commenting on the development Shailendra Kumar, Chairman, TIOL Knowledge Foundation, opined that as the levy on Pan masala and gutkha goes, the proven tool of MRP-based cess has been brought back.

With a track and trace mechanism it may yield some extra revenue, he said.

On rationalisation of late fee on delayed filing of annual returns, Vivek Jalan, Partner, Tax Connect Advisory, said filing GST annual returns in Form GSTR 9 on time has been a task for small taxpayers due to various reconciliations required.

"This year the time barring period for taking ITC was shifted to November 30 and hence filing the Annual return by December 31 was difficult. The GST Council has now relaxed and capped the late fees for filing GSTR 9 to 0.04 per cent of turnover for those taxpayers with a turnover of up to Rs 20 Crore. This is a relief to such taxpayers," he said.

Meanwhile, the Council did not take up the GoM report on online gaming as the Chairman of the panel was occupied with Meghalaya assembly elections. The panel is headed by Meghalaya chief minister Conrad Sangma.

Headed by Union Finance Minister, the Goods and Services Tax (GST) Council comprises finance ministers of states and UTs (with legislature).

With PTI Inputs