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Govt. must constitute GST tribunal: SC

Context:

The Supreme Court said that the government had no option but to constitute the Goods and Services Tax (GST) Appellate Tribunal. The tribunal has not been constituted even four years after the central GST law was passed in 2016.

Relevance:

GS-III: Indian Economy (Taxation), GS-II: Governance (Government Policies and Initiatives), Prelims

Dimensions of the Article:

  1. What is GST and the GST Act?
  2. GST Council
  3. What is GST Appellate Tribunal?
  4. Constitution of the GST Appellate Tribunal
  5. Decisions taken by the Appellate Tribunal
  6. Can the Appellate Tribunal amend its own order?

What is GST and the GST Act?

GST is a destination-based indirect tax and is levied at the final consumption point. Under it, the final consumer of the goods and services bear the tax charged in the supply chain. GST is a transparent and fair system that prevents black money and corruption and promotes new governance culture.

GST Act

  • Goods and Services Tax (GST) Act came into effect in 2017.
  • Goods and Services Tax (GST) was introduced by the Government of India to boost the economic growth of India. GST is considered to be the biggest taxation reform in the history of the Indian economy.
  • The power to make any changes in the GST law is in the hands of the GST Council. GST Council is headed by the Finance Minister. One hundred and first amendment act, 2016 introduced the GST in India in July 2017.

GST Council

  • Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
  • As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
  • The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2016, for the introduction of Goods and Services Tax in the country was introduced in the Parliament and passed by Rajya Sabha on 3rd August 2016 and by Lok Sabha on 8th August 2016.
  • GST Council is an apex member committee to modify, reconcile or procure any law or regulation based on the context of goods and services tax in India.
  • The GST council is responsible for any revision or enactment of rule or any rate changes of the goods and services in India.
  • The council contains the following members:
    1. Union Finance Minister (as chairperson)
    2. Union Minister of States in charge of revenue or finance (as members)
    3. The ministers of states in charge of finance or taxation or other ministers as nominated by each state’s government (as members).

Matters on which GST Council makes recommendations:

  • Taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;
  • Goods and services which may be subjected to or exempted from GST;
  • Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
  • Threshold limit of turnover below which goods and services may be exempted from GST;
  • Rates including floor rates with bands of GST;
  • Special rates to raise additional resources during any natural calamity;
  • Special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
  • Any other matter relating to the goods and services tax, as the Council may decide.

What is GST Appellate Tribunal?

  • The GST Appellate Tribunal (GSTAT) is the second appeal forum under GST for any dissatisfactory order passed by the First Appellate Authorities.
  • The National Appellate Tribunal is also the first common forum to resolve disputes between the centre and the states.
  • Being a common forum, it is the duty of the GSTAT to ensure uniformity in the redressal of disputes arising under GST.
  • It holds the same powers as the court and is deemed Civil Court for trying a case.
  • The Appellate Tribunal shall have the same powers as a court under the Code of Civil Procedure, 1908, for trying a case. It will be a deemed Civil Court.

Constitution of the GST Appellate Tribunal

  1. National Bench: The National Appellate Tribunal is situated in New Delhi, constitutes a National President (Head) along with 2 Technical Members (1 from Centre and State each)
  2. Regional Benches: On the recommendations of the GST Council, the government can constitute (by notification) Regional Benches, as required. As of now, there are 3 Regional Benches (situated in Mumbai, Kolkata and Hyderabad) in India.
  3. State Bench and Area Bench

Decisions taken by the Appellate Tribunal

  • The Appellate Tribunal can confirm, modify or annul the decision or refer the case back to the First Appellate Authority [or the revisional authority].
  • It may also refer the case back to the original adjudicating authority, with directions for a fresh decision after considering any additional evidence. The Appellate Tribunal shall give the decision within a period of one year from the appeal filing date. A copy of the order passed will be given to-
    • The First Appellate Authority or the revisional authority, i.e.., the original adjudicating authority
    • The appellant
    • The jurisdictional Commissioner of CGST and
    • The jurisdictional Commissioner of SGST.

How will decisions be taken by the Appellate Tribunal?

  • The powers and functions of the Appellate Tribunal will be discharged by Benches. The State Bench & Area Bench shall consist of-
    • 1 Judicial Member (Judicial)
    • 1 CGST Member (Technical)
    • 1 SGST Member (Technical)
    • State President
  • A single member can dispose of any case where the amount involved is below 5 lakhs.

Can the Appellate Tribunal amend its own order?

  • The Appellate Tribunal can amend its order passed to rectify any apparent mistake within a period of three months from the date of the order.
  • The mistake may be noticed by the Appellate Tribunal itself or may be brought to its notice by the Commissioner of GST or the other party to the appeal.
  • Any amendment which will increase the tax liability or decrease the refund or input tax credit will be done only after a reasonable opportunity of being heard has been given.
  • If the order is stayed by an order of a Court or Tribunal, the period of such stay shall be excluded from the one year period.

-Source: The Hindu

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