What is the process of appealing against a GST decision?

The Goods and Services Tax (GST) Act, 2017, provides a structured framework for taxpayers to appeal against decisions or orders passed by GST authorities. The appellate mechanism ensures fairness and accountability in tax administration.

Relevant Provisions in the GST Act

1. Section 107: Appeals to Appellate Authority
   • A taxpayer aggrieved by an order or decision passed by the adjudicating authority can appeal to the Appellate Authority within 3 months from the date of the communication of the order.
   • A pre-deposit of 10% of the disputed tax amount is mandatory to file the appeal.
2. Section 108: Powers of Revisional Authority
   • The Revisional Authority may pass orders to revise any decision by subordinate authorities under specified conditions.
3. Section 112: Appeals to the Appellate Tribunal
   • If dissatisfied with the Appellate Authority’s decision, taxpayers can further appeal to the Appellate Tribunal within 3 months of the order.
   • A pre-deposit of 20% of the disputed amount (including the pre-deposit made earlier) is required.
4. Section 117: Appeal to the High Court
   • Taxpayers can appeal to the High Court if the case involves a substantial question of law, within 180 days of the Appellate Tribunal’s order.
5. Section 118: Appeal to the Supreme Court
   • Appeals to the Supreme Court are allowed only in cases involving questions of general public importance or substantial interpretation of law.
6. Constitutional Provision: Article 265
   • Under Article 265 of the Constitution, no tax can be levied or collected without the authority of law. Appeals safeguard taxpayers’ rights in accordance with this principle.

Steps in the GST Appeals Process

1. Appeal to the Appellate Authority

• Who Can Appeal: Taxpayer or department aggrieved by the order of an adjudicating authority.
• Filing Timeline: Within 3 months (extendable by 1 month if sufficient cause is shown).
• Pre-deposit Requirement: 10% of the tax in dispute or Rs. 25 crore (whichever is lower).
• Filing Process:
  • File Form GST APL-01 online.
  • Attach supporting documents such as the adjudicating authority’s order and grounds of appeal.
• The Appellate Authority can confirm, modify, or annul the original decision.

2. Appeal to the Appellate Tribunal

• Filing Timeline: Within 3 months from the Appellate Authority’s order.
• Pre-deposit Requirement: Additional 20% of the disputed amount (cumulative 30%).
• Filing Process:
  • File Form GST APL-05.
• The Appellate Tribunal adjudicates disputes that extend beyond factual questions to legal interpretations.

3. Appeal to the High Court

• Eligibility: Only in cases involving a substantial question of law.
• Filing Timeline: Within 180 days of the Appellate Tribunal’s order.
• Appeals are heard under the writ jurisdiction of the High Court.

4. Appeal to the Supreme Court

• Eligibility: Cases involving national importance or significant interpretation of constitutional provisions.

Landmark Cases in GST Appeals

1. Mohit Minerals Pvt. Ltd. v. Union of India (2022)

• Issue: Constitutionality of GST on ocean freight under reverse charge.
• Judgment: The Supreme Court ruled in favor of the taxpayer, setting a precedent for legal challenges in GST.

2. M/s Canon India Pvt. Ltd. v. Commissioner of Customs (2021)

• Issue: Jurisdictional authority in issuing orders under GST.
• Judgment: The Supreme Court emphasized the proper channel for appeals under tax laws, including GST.

3. VKC Footsteps India Pvt. Ltd. v. Union of India (2021)

• Issue: Refund of unutilized input tax credit under inverted duty structure.
• Judgment: Highlighted procedural and substantive aspects of appeals under GST law.

4. Material Recycling Association of India v. Union of India (2020)

• Issue: Levy of IGST on import of goods and subsequent refund claims.
• Judgment: Clarified appellate jurisdiction under the GST framework.

Critical Considerations in GST Appeals

1. Timely Filing: Appeals must be filed within the stipulated time limits to avoid rejection.
2. Mandatory Pre-deposit: Compliance with pre-deposit requirements is essential for proceeding with appeals.
3. Documentation: Maintain detailed records of the disputed tax amounts, supporting evidence, and legal arguments.
4. Legal Expertise: Engage competent legal counsel for appeals involving complex legal or constitutional questions.

Conclusion

The GST appeal mechanism under the CGST Act, 2017, ensures a fair and structured process for addressing taxpayer grievances. Provisions such as Sections 107 to 118 provide multiple appellate levels, ensuring justice and accountability. Landmark cases like Mohit Minerals and VKC Footsteps demonstrate how taxpayers can leverage the appellate framework to address disputes effectively while adhering to procedural requirements.