GST Council may approve Tribunal Blueprint in upcoming Meeting, expect Functional GST Appellate Tribunal by Year-End

The Goods and Services Tax (GST) Council is preparing for a crucial meeting later this month, where it will address multiple significant issues. One of the key agenda items is the finalization of the operational framework for the much-anticipated GST appellate tribunal, which aims to streamline tax dispute resolution.

A senior government official disclosed that during the meeting, the Council will present the expected final blueprint, specifically focusing on the operational aspects, for approval. This step is crucial in paving the way for the tribunal to become fully functional at both the central and state levels. If approved, the tribunal is expected to commence operations by November.

To establish the tribunal, extensive groundwork has already been undertaken, including amending the GST law during the Budget session. The final rules will soon be released, accompanied by necessary changes to state laws, as mentioned by the official.

Another crucial issue to be discussed during the meeting is the taxation of online gaming, casinos, and races. This matter gained significant attention following a recent judgment by the Karnataka High Court, which invalidated a Rs. 21,000-crore GST notice issued to an online gaming platform called Gameskraft.

A panel of state ministers, tasked with examining the taxation issue, previously reached a consensus on imposing a 28% GST on online gaming. However, they were divided on whether the tax should be levied solely on the fees charged by the platform or on the entire consideration, including the bet amounts received from participants. Consequently, the panel referred all suggestions to the GST Council in December 2022 for a final decision. However, sources indicate that due to indecisiveness among stakeholders, the matter may not be resolved in the upcoming meeting.

In addition to these issues, the GST Council will address the establishment of the GST appellate tribunal. During a meeting on February 18, the Council agreed to table the draft legislation for the tribunal, following extensive deliberations and consultations. The proposed tribunal will consist of a "Principal Bench" in New Delhi, with a president, a judicial member, a technical member representing the center, and a technical member representing the state. State Benches will also be established, with the number determined based on the population of the respective states.

The national appellate Bench of the tribunal will primarily handle disputes related to the "place of supply" between the tax department and taxpayers. However, it will not address appeals concerning divergent rulings by state appellate tribunals.

The GST Council had previously accepted a panel report from state ministers regarding the tribunal, incorporating some modifications. The proposed changes to the GST law will be shared with the states for their input.

Notably, the resolution process for taxpayers aggrieved by rulings of tax authorities often takes a long time because high courts lack specialized Benches to handle GST matters. The establishment of the GST appellate tribunal is expected to address this issue and expedite the resolution process.

The upcoming GST Council meeting holds significant importance for the taxation landscape, as it will determine the future of the GST appellate tribunal and provide clarity on the taxation of online gaming, casinos, and races.

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