GSTAT Functionality Why the Parliamentary Panel Wants Action
The functionality of GSTAT, India’s Goods and Services Tax Appellate Tribunal, remains in limbo despite multiple notifications and legal backing. In July 2025, a Parliamentary Standing Committee on Finance expressed concern over this delay and formally recommended that the Ministry of Finance take urgent steps to make GSTAT operational.
This blog explains what GSTAT is, why it matters for taxpayers and consultants, and what the government’s next steps must be.
What Is GSTAT and Why It Matters
The Goods and Services Tax Appellate Tribunal (GSTAT) is a quasi-judicial authority established under Section 109 of the CGST Act, 2017. It is the final authority for GST appeals below the High Court level.
Key Roles of GSTAT:
- Hear appeals against orders from appellate authorities or revisional authorities.
- Promote uniformity in GST interpretation across India.
- Reduce burden on High Courts and Supreme Court.
- Enable faster resolution of tax disputes.
What the Parliamentary Panel Highlighted
In its latest review, the Standing Committee on Finance flagged the following concerns:
- Unreasonable delay in operationalising GSTAT despite amendments and funding provisions.
- Businesses and consultants burdened by litigation costs due to absence of a centralised appellate body.
- Contradictory state-level decisions in GST appeals impacting tax certainty.
The panel urged the Finance Ministry to fast-track tribunal formation by notifying remaining appointments, infrastructure, and procedural rules.
Source: Parliament Committee Report (July 2025)
Legal and Administrative Background
Key Legal Provisions:
| Provision | Description |
|---|---|
| Article 323B | Empowers Parliament to create tribunals for tax matters. |
| Section 109–121 | Define constitution, powers, and procedure of GSTAT. |
| CGST (Amendment) Act, 2023 | Enabled setting up of Principal Bench and State Benches. |
| GSTAT (Appointment and Conditions of Service) Rules, 2024 | Notified to regulate member appointments and terms. |
Current Bottlenecks in GSTAT Functionality
Despite the enabling laws, full functionality is pending due to:
- Delay in appointment of Judicial and Technical Members.
- Infrastructure and office space allocation in states not completed.
- Lack of digital backend integration with GSTN portal.
- No clarity on transition of pending cases from High Courts.
Practical Tip from Efiletax
Until GSTAT becomes functional, taxpayers facing appeal rejections or penalty orders must follow the existing route via High Courts, which could be time-consuming and expensive.
We recommend:
- Filing responses to SCNs and appeals with strong documentation.
- Exploring advance ruling forums for interpretation issues.
- Seeking legal review of pending orders before limitation periods expire.
Why This Matters for Taxpayers and Consultants
If you’re dealing with GST disputes—especially large demand notices—lack of GSTAT means limited recourse and higher litigation pressure. Businesses need predictable timelines and consistent rulings, which GSTAT was designed to ensure.
Next Steps: What the Government Must Do
Based on the panel’s direction, the Finance Ministry is expected to:
- Finalise remaining appointments to the tribunal.
- Allocate operational budgets and office infrastructure.
- Enable digital filing and tracking via GST portal.
- Notify procedural clarifications under Rule 109C and 110.
All this must happen before the year-end to avoid judicial backlog and compliance uncertainty in FY 2025–26.
GSTAT Functionality: Frequently Asked Questions (FAQ)
Q1. Can GST appeals be filed now with GSTAT?
Ans: No. As of August 2025, GSTAT is not yet functional. Appeals must go to High Courts.
Q2. Where will GSTAT benches be located?
Ans: A Principal Bench in Delhi and State Benches across key zones.
Q3. Can old pending appeals be transferred to GSTAT once it’s functional?
Ans: Government is expected to notify transitional provisions. But clarity is pending.
Summary
GSTAT remains non-functional despite legal backing, prompting a July 2025 Parliamentary panel to urge swift action from the Finance Ministry. The delay affects thousands of GST litigants and adds pressure to the judicial system. Operationalising GSTAT is now critical for tax certainty and legal recourse.