Establishment of GSTAT: Finance Ministry reveals Budget allocation, Utilisation of Funds
Establishment of GSTAT: Finance Ministry Discloses Budget Allocation and Fund Utilisation
The Ministry of Finance has revealed key details regarding the establishment and operationalisation of the Goods and Services Tax Appellate Tribunal (GSTAT), including specific budget allocations and the utilisation of funds for the financial year 2025-26. The information was provided in response to an unstarred question in the Lok Sabha on Monday. GSTAT...
The Ministry of Finance has revealed key details regarding the establishment and operationalisation of the Goods and Services Tax Appellate Tribunal (GSTAT), including specific budget allocations and the utilisation of funds for the financial year 2025-26. The information was provided in response to an unstarred question in the Lok Sabha on Monday.
GSTAT Benches and Locations
According to the Ministry, 31 State Benches have been notified at 45 locations across India, along with a Principal Bench situated in New Delhi. These benches were officially notified through S.O. 5063(E) dated November 26, 2024, with periodic amendments to update locations and numbers as needed.
Despite these notifications, none of the GSTAT benches—including the Principal and State Benches—are fully operational yet. The process of operationalising the benches is ongoing, with the appointment of members, staff, and other logistical arrangements currently underway.
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For the financial year 2025-26, the Central Government allocated Rs. 210.04 crore for the establishment and operationalisation of GSTAT. Out of this, approximately Rs. 3.05 crore has been utilised as of July 2025. The remaining funds are expected to be deployed as the benches become functional and further infrastructure and staffing requirements are met.
The Finance Ministry attributed the delay in making GSTAT benches operational to a series of legal and legislative hurdles:
- The original provisions of sections 109 and 110 of the Central GST Act were challenged in court and struck down by the Madras High Court in 2019.
- Subsequent government attempts to amend and rationalise tribunal laws, and the enactment of the Tribunal Reforms Act, 2021, also faced legal challenges.
- It was only after recommendations from a Group of Ministers and amendments made by the Finance Act, 2023, and the CGST (Second Amendment) Act, 2023, that the legislative framework for GSTAT was brought in line with the Tribunal Reforms Act.
- Since then, steps have commenced to appoint members and operationalise the benches.
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In the absence of an operational appellate forum, several interim measures have been adopted:
- A new sub-section, 16(5), has been inserted in the CGST Act to relax timelines for availing input tax credit for financial years 2017-18 to 2020-21.
- Amendments to Sections 107 and 112 have reduced pre-deposit requirements for filing GST appeals, easing taxpayer cash flow.
- An amnesty scheme under Section 128A provides for waiver of interest or penalty if the full tax demand is paid by March 31, 2025.
The Finance Ministry stated that these interim steps are aimed at mitigating the hardships faced by taxpayers while efforts to operationalise GSTAT continue in earnest.
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