GSTAT can take up indirect tax disputes, says Sitharaman

New Delhi: In a move to align terms of service of judicial and technical members of goods and services tax appellate tribunals or GSTAT, the Lok Sabha on Tuesday passed the Central Goods and Services Tax (Second Amendment) Bill, 2023 to raise the age limit of president and members of the GST appellate tribunal. The bill, however, seeks to cap the age for the president and members of GSTAT at 70 years and 67 years, respectively, higher than the 67 years and 65 years specified earlier.

Piloting the bill, Union Finance Minister Nirmala Sitharaman said that taxpayers who are litigating against the demands for goods and services (GST) in various high courts or the Supreme Court will have the liberty to withdraw their cases and approach GSTAT once the benches start functioning. The Central Goods and Services Tax (Second Amendment) Bill, 2023, was passed by Lok Sabha by a voice vote.

However, experts in the GST regime are of the view that the GSTAT functioning is the need of the hour as many taxpayers were awaiting the setting up of the GST Tribunal for filing appeals against the orders passed by the first appellate authorities and to obtain certainty on the tax positions adopted. “Now, the passing of the Bill by the government could be a game-changer for the industry as well,” they said.

An advocate with 10 years of ‘substantial experience’ in litigation in matters relating to indirect taxes in the Appellate Tribunal would be eligible to be appointed as a judicial member of GSTAT. As per the amendment, the president and judicial and technical members of GSTAT shall hold office for four years, or until he attains the age of 70 years and 67 years, respectively, whichever is earlier.

The rules notified by the government earlier had fixed the age limit for the president and members of GSTAT at 67 years and 65 years, respectively. “The passage of the bill would align terms of service of judicial and technical members of GSTAT with the Tribunal Reforms Act of 2021,” the finance minister said.

Meanwhile, Sitharaman also said that the valuation rules for levying 28 per cent GST on entry-level bets on online gaming platforms are effective prospectively. “The clarification on online gaming was issued. 28 per cent is the tax and as to who it will apply to and on whom the incidence will fall is clearly explained. The valuation rules to exclude winnings are prospective. So, I hope there is no confusion on that,” she said in the Lok Sabha while replying to a discussion in the House on the GST (Second Amendment) Bill.

The bets placed from the winning amount on online gaming portals will not attract 28 per cent GST with effect from October 1. In its meeting in August, the GST Council clarified that 28 per cent GST is applicable on online gaming. Thereafter, amendments to the Central GST Act were cleared by Parliament in August to give effect to the decision of the Council. The amendments provide that GST will be levied on entry-level bets on online gaming platforms and not on what players pay in each game from the winning amount.