Goods and Services Tax Tribunals: A Long-Awaited Relief
The much-anticipated Goods and Services Tax Appellate Tribunals (GSTAT) could take an additional six months to become operational, further prolonging relief for taxpayers. Initially expected to be functional by December 2024, the delay is attributed to challenges in appointing members, allocating infrastructure, and finalising IT systems.
Why the Delay?
- Pending Appointments:
While applications and interviews for judicial and technical members concluded earlier, final shortlisting and verification are still in progress. Each of the 44 benches will include three members from the central government and one from the state government. - Infrastructure Challenges:
Real estate allocation for the tribunal offices has been sluggish. As of now, only 50% of the required locations have been identified. - IT Infrastructure Lag:
Although the GSTAT’s paperless software is ready, IT procurement is delayed and expected to be completed by March 2025. - Staffing Gaps:
Recruitment of supporting staff and state bench appointments remains incomplete, contributing to the prolonged timeline.
Impact on Businesses and Judiciary
The absence of a functional GSTAT has caused substantial delays in resolving tax disputes, resulting in increased litigation at high courts. According to data, over 14,227 GST appeals were pending as of August 2023, a number that has likely risen since.
Experts highlight that high courts are overburdened with GST-related writs due to the unavailability of alternative forums. Taxpayers often face dismissal of their cases on technical grounds, such as the existence of alternative remedies or the absence of legal questions.
Case Law Insights: The Need for GSTAT
Legal experts, including Shivam Mehta of Lakshmikumaran and Sridharan Attorneys, stress the importance of GSTAT in reducing high court dependency. Several high courts have refused to entertain writs, leaving taxpayers in a difficult position. This highlights the critical role GSTAT will play in ensuring faster dispute resolution and reducing judicial bottlenecks.
Key Features of GSTAT
- Comprehensive Composition:
The tribunal will consist of 44 benches across the country, with members drawn from central and state governments. - Paperless Operations:
GSTAT will be fully electronic, enabling seamless and efficient case handling. - Dedicated Leadership:
Sanjaya Kumar Mishra, former Chief Justice of Jharkhand High Court, has been appointed as GSTAT’s president for a four-year tenure.
What Businesses Can Expect
Once operational, GSTAT is expected to:
- Ease Business Operations: By reducing litigation timelines, businesses can focus on growth rather than prolonged tax disputes.
- Lighten Judicial Burden: High courts will experience reduced caseloads, enabling faster resolution of non-GST matters.
- Enhance Compliance: Clear and accessible resolution mechanisms may encourage more businesses to stay compliant with GST rules.
Conclusion
While the delay in GSTAT’s operations is a setback, its eventual launch promises significant relief for taxpayers and the judiciary. Businesses should prepare to leverage this forum for faster resolution of disputes. In the meantime, legal counsel can help navigate the high courts and alternative remedies to manage ongoing cases effectively.