From UPSC perspective, the following things are important :
Prelims level: GST, GST Council
Mains level: Read the attached story
The GST Council reached a broad consensus on setting up GST Appellate Tribunal; likely to be included in Finance Bill 2023.
What is GST Appellate Tribunal?
- The GST Appellate Tribunal is a quasi-judicial body proposed to be established to resolve disputes related to the Goods and Services Tax (GST) in India.
- It will function as an independent body to hear appeals against orders passed by the GST authorities or the Appellate Authority.
- The tribunal will be composed of a national bench and various regional benches, headed by a chairperson appointed by the central government.
- The proposed tribunal is expected to help expedite the resolution of disputes related to GST and reduce the burden on the judiciary.
Under GST, if a person is not satisfied with the decision passed by any lower court, an appeal can be raised to a higher court, the hierarchy for the same is as follows (from low to high):
- Adjudicating Authority
- Appellate Authority
- Appellate Tribunal
- High Court
- Supreme Court
Why need such Tribunal?
- Unburden judiciary: GST Appellate Tribunal will help resolve the rising number of disputes under the 68-month old indirect tax regime that are now clogging High Courts and other judicial fora.
- Improve efficiency of GST System: Overall, the establishment of the GST Appellate Tribunal is expected to improve the efficiency and effectiveness of the GST system in India.
- Independent mechanism: The proposed Tribunal will provide an independent and efficient mechanism for resolving disputes related to GST.
- Avoid tax evasion: It will help to expedite the resolution of disputes, reduce the burden on the judiciary, and promote greater certainty and predictability in the GST system.
Issues with present litigation
- Compliance issues: The GST system is relatively new in India, having been implemented in 2017, and there have been several issues with compliance and interpretation of rules and regulations.
- Complex adjudication hierarchy: The current dispute resolution mechanism involves multiple layers of adjudication, starting with the GST officer and as mentioned above.
- Time consuming process: This process can be time-consuming, costly, and burdensome for taxpayers, especially small and medium-sized enterprises.
How is it being established?
- The proposed GST Appellate Tribunal is expected to be included in the Finance Bill 2023.
- This means that it will become a part of the central government’s budget, and will have legal standing.
Do you know?
Income Tax Appellate Tribunal (ITAT) was the first Tribunal in India to be created on 25th January, 1941 and is also known as ‘Mother Tribunal’! And it functions under the Ministry of Law and Justice and not the obvious looking Ministry of Finance.
Back2Basics: What is a Finance Bill?
- A Finance Bill is a proposed legislation that is introduced by the government to implement the financial proposals of the Union Budget for the upcoming financial year in India.
- It is a comprehensive document that outlines the government’s revenue and expenditure for the year, including changes in tax laws, tariffs, customs duties, and other fiscal measures.
- Since the Union Budget deals with these things, it is passed as a Finance Bill.
Types of Finance Bills
- There are different kinds of Finance Bills — the most important of them is the Money Bill. The Money Bill is concretely defined in Article 110.
- In India, there are three types of Finance Bills that can be introduced in the Parliament:
- Annual Finance Bill: This is the most common type of Finance Bill and is introduced by the government every year to give effect to the tax proposals announced in the Union Budget. It contains provisions related to taxation, expenditure, and revenue collection for the upcoming financial year.
- Finance Bill (Money Bill): A Money Bill is a type of Finance Bill that contains only provisions related to taxation and expenditure, but does not include any other matter. Money Bills are deemed to be passed by the Lok Sabha, the lower house of Parliament, and do not require approval from the Rajya Sabha, the upper house of Parliament.
- Finance Bill (Non-Money Bill): This type of Finance Bill contains provisions related to taxation and other matters, such as changes in the structure of regulatory bodies or the introduction of new policies. Unlike Money Bills, Non-Money Bills must be passed by both the Lok Sabha and the Rajya Sabha to become law.
How is money bill different from Finance Bill?
- A Money Bill is certified by the Speaker as such — in other words, only those Financial Bills that carry the Speaker’s certification are Money Bills.
- Article 110 states that a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:
(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) the regulation of the borrowing of money or any financial obligations undertaken
(c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) the appropriation of moneys out of the consolidated Fund of India;
(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) any matter incidental to any of the matters specified in sub clause (a) to (f)
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