Setting up GSTAT: GoM may pitch for easing eligibility for states' officers

States learnt to be at loggerheads with Centre as they seek equal representation

The high-level ministerial panel on Goods and Services Tax Appellate Tribunal (GSTAT) may decide on inclusion of state representation and ease qualifications for technical members of the appellate tribunal. It may take up the matter in its upcoming meeting on August 17.

The states are learnt to be at loggerheads with the Centre as they seek equal representation in the tribunal.

The GST Council-tasked group of ministers (GoM) — headed by Haryana deputy chief minister Dushyant Chautala — would address conflicts and concerns of states with respect to setting up the GSTAT.

The panel is learnt to be in favour of easing the qualification criteria for technical members (state). At present, officers should have worked in state governments and spent 25 years in Group A posts (commissioner-level). They need to be experienced in taxation and finance.

It was argued that in some states, the entry level of direct recruitment is not at the level of Group A. This led to a situation where even the senior-most officer may not have spent 25 years in that category.

To cater to this situation, a provision could be added to allow the reduction of the 25-year criteria through a notification, if approved by the council.

The ministerial panel is learnt to be examining the amendments proposed in the Central GST Act, 2017, tabled in the last council meeting in June.

According to it, there should be a national principal Bench of GSTAT in New Delhi. It should have a president and consist of a technical member — either from the Centre or a state.

The GoM is expected to submit the final report on the matter to the GST Council this month. The council will take a final call in the next meeting likely to be held in September.

In addition to the principal Bench, the government would constitute a number of Benches at locations as may be recommended by the council. It would be based on the request of a state government, where applicable, the draft amendment proposed.

“The GoM would examine the feasibility of the proposed amendments and how to make them achievable. This is because it is easier if the number of Benches in a particular state is even.”

“In case, the number of Benches is odd, the Bench could have a third member either from the state or Centre in an alternative manner. Or, it may make it a four-member Bench,” an official said.

He added that a ministerial panel needs to ensure that the number of technical members — both from the Centre and states — should be equal in every state and overall nationally, as directed by the Madras High Court.

This apart, if the tax or input tax credit involved or the amount of fine, fee or penalty determined in any order appealed against is below Rs 5 lakh, it will be heard by a Bench consisting of a single member.

“Business houses have faced several interpretational challenges in GST during the past five years. This has been escalated to the high courts, as the GST tribunals are yet to be set up. Having completed five years of GST, businesses would expect that the tribunals are set up expeditiously based on the existing legislative framework,” said MS Mani, partner (indirect taxes) at Deloitte.

GSTATs were notified by the government just after the GST law came into effect in 2017. However, the process couldn’t move further due to a stay order by the Madras HC. It stated that expert members (technical) cannot exceed the number of judicial members on the Bench in the tribunal.

Subsequently, certain observations were made even by the Supreme Court over rationalising tribunals and it had directed the government to come up with fresh rules. Many of the amendments proposed in the June council meeting are in compliance with judicial orders.

Story so far

• GSTAT was notified by the government just after the GST law came into effect in 2017, but the process couldn’t move further
• Due to stay order by Madras HC, the process couldn’t move further 
• It was viewed that technical members can’t exceed the number of judicial members
• A group of ministers was tasked to examine the concerns and conflict with states on the matter
• States seek equal say in the appellate tribunal
• Subsequently, certain observations were made by Supreme Court over rationalising tribunals directing the government to have fresh rules
• A draft amendment proposed in the June Council meeting in compliance with judicial orders
• GST Council expected to meet in September; will take up the GoM report