GSTAT bench rollout will clear backlog and ease judicial pressure, say experts, ETCFO
In a significant step towards improving India’s Goods and Services Tax (GST) dispute resolution system, the Ministry of Finance has issued a new notification amending the jurisdiction of the Goods and Services Tax Appellate Tribunal (GSTAT) benches. The move, published on 26th November 2024, addresses critical accessibility issues faced by taxpayers by introducing Circuit Benches and redefining jurisdictions for several GSTAT State Benches.
Revised Jurisdictions for Key GSTAT Benches
This latest notification, an amendment to the earlier notification from July 2024, brings clarity to the locations and operational structure of GSTAT benches across India. The government has announced that some existing jurisdictions are being swapped. For example, Varanasi will now fall under the jurisdiction of the Prayagraj bench, and Chandigarh will be part of the Jalandhar bench’s jurisdiction, and vice versa. This shift aims to streamline the process and provide better access for taxpayers in various regions.
In addition to the changes in the jurisdictions, the notification introduces a new clause outlining the districts under the jurisdiction of various State Benches of GSTAT. With Circuit Benches now set to operate on a rotational basis, the appellate process will be more accessible to taxpayers, especially in remote or underserved areas. These efforts aim to minimize logistical challenges and make the tax dispute resolution system more efficient and taxpayer-friendly.
Industry Experts Welcome the Changes
Industry experts are optimistic about these developments, highlighting the positive impact on accessibility and efficiency. Rajat Mohan, Senior Partner at AMRG & Associates, praised the move, highlighting that it would significantly improve access to the appellate process for taxpayers nationwide. He noted that Circuit Benches would bring the resolution mechanism closer to regions that have historically been underserved, reducing the burden on taxpayers and fostering greater trust in the GST system.
“The establishment of Circuit Benches ensures that taxpayers in distant areas will no longer have to travel long distances to resolve their disputes. This is a major leap towards making the tax system more inclusive and transparent,” Mohan added.
Concerns Over Backlog Addressed
Parag Mehta, Partner at N.A. Shah Associates LLP, echoed this sentiment, emphasizing the long-awaited operationalization of GSTAT after more than seven years since GST’s introduction. He pointed out the backlog of cases and the increasing pressure on High Courts due to the lack of operational Tribunals.
Mehta expressed hope that these new measures would lead to the faster resolution of disputes, thus easing the burden on both taxpayers and the judicial system.
“It’s been over seven years since GST was introduced, and the GSTAT benches are finally taking shape. The backlog of cases has been piling up, and businesses have been left uncertain about their dispute resolutions. This delay is forcing taxpayers to seek recourse through writ petitions, creating additional pressure on the High Courts,” said Mehta. “I am hopeful that these new measures will expedite the process and provide the relief businesses have been waiting for.”
A Clear Path for Taxpayers to File Appeals
The notification also provides clarity on the districts falling under each GSTAT bench’s jurisdiction, offering taxpayers the necessary transparency to plan appeals effectively. Aditya Singhania, founder of Singhania’s GST Consultancy, said the move was a positive development, noting that the government’s efforts, including the appointment of the President and members, as well as the establishment of infrastructure and software systems, signal that GSTAT will become fully operational in the upcoming fiscal year.
“The government has been working diligently to ensure that GSTAT becomes operational as soon as possible. With the appointment of key officials, ready-to-use software, and physical infrastructure in place, the foundation is set for GSTAT to function effectively. The recent clarity on State Benches and jurisdiction now allows appellants to plan their cases accordingly,” Singhania remarked.
Incentives for Taxpayers to Resolve Disputes
Singhania also highlighted the potential for a surge in appeals, especially with the ongoing waiver scheme for interest and penalties, which is set to run until March 2025. This scheme provides taxpayers with a significant incentive to resolve pending disputes without incurring additional financial burdens.
“The waiver of interest and penalties until March 2025 offers businesses a unique opportunity to resolve disputes without worrying about escalating costs. This will likely result in a higher volume of cases being filed, and with the Circuit Benches in place, the resolution process will be far more efficient,” Singhania added.
A Step Toward Efficient and Inclusive Tax Governance
According to tax experts the notification represents a crucial step in the government’s ongoing commitment to improving the GST framework and creating a more efficient and accessible dispute resolution mechanism. It aligns with India’s broader goal of enhancing the ease of doing business and ensuring justice is accessible to all taxpayers, no matter their location.
As GSTAT gets closer to full operationalisation, the tax ecosystem in India is poised for greater efficiency, reducing the judicial backlog, and offering businesses the much-needed certainty they’ve been waiting for.
“We are at a pivotal moment for GST dispute resolution in India. With the introduction of new GSTAT benches, a clear jurisdictional framework, and Circuit Benches, taxpayers can expect a more streamlined and accessible system,” concluded Rajat Mohan.
