National GST appellate tribunal on anvil, Council to decide on July 21

The GST Council will consider setting up of a National Appellate Tribunal in Delhi with three regional benches with members from judiciary as well as tax departments to hear appeals against the order of the appellate authority set up by states under the GST regime.

According to the proposal which will be placed before the Council on July 21, three benches of the national appellate tribunal would be set up at Mumbai, Chennai and Kolkata.

The proposal is aimed at dealing with the problem faced by industry on account of contradictory orders passed by Authority for Advance Ruling (AAR) in different states. It has also been observed that most of the AAR orders are in the favour of the revenue department as these authorities are manned by tax officials.

Industry has been demanding that an independent judicial member should preside over the functioning of the national GST appellate tribunal to be set up for adjudicating disputes between revenue and taxpayers.

The Centre and state governments would have to amend the GST law if the proposal is approved by the Council in its next meeting on July 21.

Under the GST (Goods and Services Tax) law, an aggrieved party can file an appeal against the order of the AAR within a period of 30 days, which may be further extended by a month.

As per the law, all states are required to set up at least one AAR for seeking advance ruling over GST levy and one appellate authority to hear appeals against the AAR order.

In March, the New Delhi bench of the AAR had held that duty-free shops at airports are liable to deduct GST from passengers. However, these shops were exempt from service tax, and Central Sales Tax in the earlier regime.

Further, the solar industry too was left in a vexed situation when the Maharashtra AAR said that 18 per cent GST rate would be levied for installation works, but the Karnataka-bench of AAR passed an order levying 5 per cent GST on the same.