GST “appeals & alternate remdies” SURAT CHAPTER OF WIRC of ICAI Dated 08/07/2017 A Presentation by CA. (Dr.) Shailendra Saxena   B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.

GST Appeals & REVISION

Appeals & Rivision: overview The GST Law provides for the following hierarchy for appeals: 1. Appeal to First Appellate Authority 2. Revision by Commissioner (applicable to SGST) 3. Appeal to Appellate Tribunal 4. Appeal to High Court 5. Appeal to Supreme Court There will be differences in the appellate mechanism available to the Tax Administration between CGST and SGST. GST Law specifically empowers the department to file appeals before the First Appellate Authority and the Appellate Tribunal in respect of CGST, for SGST it provides for powers to revise adjudication orders.

The GST law provides for a four-Layered appeal structure Appeal against the orders  passed by…. lies to the following authority Appeal level Sections of GST law Adjudicating Authority First Appellate Authority 1ST 107 Appellate Tribunal(With in 3 Months) 2nd 112 Appellate Tribunal High Court(With in 180 days) 3rd 117 High Court Supreme Court 4th 118

Appeals & Rivision: overview The provisions regarding appeal to High Court, appeal to Supreme Court are common between CGST and SGST. IGST Law does not have separate provisions for appeals. The provisions for CGST shall also apply IGST as well. In present sales tax / VAT Regime which provides for constitution of a special authority called Central Sales Tax Appellate Authority. (CSTAA) for resolution of inter-State disputes, the GST Law provides that disputes involving two States or the Centre and any State shall directly be taken to Supreme Court from Appellate Tribunal. There are mandatory pre-deposit conditions for filing appeal before the First Appellate Authority and the Appellate Tribunal. The presumption appears to be that no separate stay application for stay of recovery would be required once the pre-deposit conditions are met.

Authorized officer before GST officer First Appellate Authority and Appellate Tribunal, namely:- 1. Relative or regular employee of Taxpayer 2. Advocate entitled to practice in India 3. Chartered Accountant, Cost Accountant or a Company Secretary holding valid Certificate of Practice 4. Person with qualifications specified by Central Government. 5. Retired officer of commercial tax department of any state govt./UT/Board not below the rank of Group-B Gazetted officer for a period of not less than 2 years 6.Any person who has been authorised to act as a goods and services tax practitioner on behalf of the concerned registered person.

Appeals to First Appellate Authority office (Sec.107) Any person aggrieved by any decision or order passed against him under this Act by an adjudicating authority, may appeal to the prescribed First Appellate Authority.(Assessee Appeal) The authorized officer makes an application to the First Appellate Authority, such application shall be dealt with by the First Appellate Authority.(Dept. Appeal) Every appeal shall be filed within three months from the date on which the decision or order sought to be appealed against is communicated to the Commissioner of GST, or, as the case may be, the person preferring the appeal. No appeal shall be filed unless the appellant has deposited a sum equal to ten per cent (Pre-Deposit) of the amount in dispute arising from the said order, in relation to which the appeal has been filed.

No appeal shall be filed, unless the appellant has deposited a sum equal to full(part) or ten percent of the amount in dispute arising from the said order, in relation to whichthe appeal has been filed.[Sec. 107(6)] ISSUE NEEDS TO BE CLARIFIED: The quantum of pre-deposit amount is more than the current prescribed limits. Thus it should be only 7.5%. As per current provisions, there is an upper limit of Rs 10 crores as mandatory pre-deposit. The said limit should be incorporated in the GST provisions also. Circular No 984/8/2014-CX., dated 16-9-2014 has clarified with respect to the manner of computation of pre-deposit. The said circular also clarifies that the no coercive recovery proceedings will be initiated during the pendency of the appeal. The said clarification should be incorporated in the statutory provisions itself. also clarifies that amounts paid under investigation / audit have to be included as part of pre-deposit amount. The same needs to be incorporated in the statutory provisions. It is should be clarified that the mandatory pre-deposit is not required for the interest amount. The mandatory pre-deposit can be paid from utilization of input credit. The statutory provisions should specifically incorporate the same.

Revisional powers of Commissioner (Sec. 108) The Commissioner may on his own motion or upon information received by him, call for and examine the record of any proceeding under this Act, and if he considers that any decision or order passed under this Act by any officer subordinate to him is erroneous in so far as it is prejudicial to the interest of the revenue, he may, if necessary, stay the operation of such decision or order for such period as he deems fit and after giving the person concerned an opportunity of being heard. Issue No.1:-The concept of revision power of Commissioner is not present under the Central Taxes. Under the GST regime the provisions of CGST and SGST should be pari materia. Further the power of revision of orders is mis-used and thus increases litigation. Therefore no power of revision should be available under SGST law also. Issue No.2:-Section 108 under SGST law is harsh. shailendra.saxena@jlnus.com

Revisional powers of Commissioner [Sec. 108 (2)(b)] The Commissioner shall not exercise any power under sub-section (1) (b) if more than three years have expired after the passing of the decision or order sought to be revised. Issue No.1:-If the decision or order passed under this Act by an officer subordinate to the Commissioner involves an issue on which the Appellate Tribunal or the High Court has given its decision which is prejudicial to the interest of revenue in some other proceedings and an appeal to the High Court or the Supreme Court against such decision of the Appellate Tribunal or as the case may be, the High Court is pending, the period spent between the date of the decision of the Appellate Tribunal and the date of the decision of the High Court or as the case may be, the date of the decision of the High Court and the date of the decision of the Supreme Court shall be excluded in computing the period. Issue No.2:-the pendency of an appeal by any other assessee and anywhere in India will result in reopening of the proceedings by an assessee. Therefore the reversionary proceedings can be initiated even after the period of 8-10 years by the reversionary authority. Thus, the scope of revision will be very wide. The above provisions should be made applicable only when the issue is pending in respect of the appeal filed by or against the same assessee and in the same State. Therefore the provisions should apply only with respect to the proceedings in an appeal which are qua-assessee and qua-State. shailendra.saxena@jlnus.com

Appeals to the Appellate Tribunal [Sec.112(2)] The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order, does not exceed Fifty Thousand rupees. ISSUE:-As per the current provisions, the Appellate Tribunal cannot refuse to admit an appeal below the specified limit which involves the question relating to rate of duty or valuation of goods. The said exception has been made since the dispute relating to determination of rate of duty and valuation are recurring in nature and therefore needs to be adjudged irrespective of the quantum. There is no provision under the GST law for the same. The limit of Rs.50,000/- prescribed for admitting of the appeal before the Appellate Tribunal should not apply in cases where the issue involved is of rate of duty or valuation.

“ RECTIFICATION OF MISTAKE BY TRIBUNAL: The Appellate Tribunal may amend any order passed by it under sub-section (1) so as to rectify any mistake apparent from the record, if such mistake is noticed by it on its own accord, or is brought to its notice by the commissioner of GST or the other party to the appeal within a period of three months from the date of the order: [Sec. 113(3)] Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. ISSUES:- Currently the time limit for rectification of mistake by Appellate Tribunal is 6 months from the date of the order. Thus, the time limit provided in the said section is very less. The time limit for rectification of mistakes in the order should be increased from 3 months to 6 months.

Appeal to the High Court (Sec. 117 ) Who can file appeal Order appealed against Time limit to file Appeal Appeal to High Court Commissioner of GST or any other party aggrieved Order of Appellate Tribunal involving substantial question of law Not appealable – Order of Appellate Tribunal involving dispute between two states, or a state and centre regarding nature of supply or place of supply Within 180 days of communication to the concerned party Delayed filing allowed on show of sufficient cause shailendra.saxena@jlnus.com

Appeal to the Supreme Court (Sec. 118 ) Who can file appeal Order appealed against Time limit to file Appeal Appeal to Supreme Court Not specified As per the Supreme Court Rules and Code of Civil Procedure Order of High Court. Order of Appellate Tribunal involving dispute between two states, or a state and centre regarding nature of supply or place of supply As per the Supreme Court Rules and Code of Civil Procedure shailendra.saxena@jlnus.com

THANKS!! Any Questions ? Contact for post session query: CMA. (Dr.) Shailendra Saxena Bharuch   E-mail: shailendra.saxena@jlnus.com Cell: +91-93774-10260 | Website: www.jlnus.com shailendra.saxena@jlnus.com