The absence of a dedicated and operational appellate forum under the Goods and Services Tax (GST) framework has long been a significant gap in India’s tax adjudication system.
Since the introduction of GST in 2017, taxpayers have been deprived of the statutory second-tier of appeal envisaged under the Central Goods and Services Tax Act, 2017.
This has resulted in mounting litigation before High Courts and a growing backlog of unresolved tax disputes. Recognizing this systemic deficiency, the Union Government took a decisive step by notifying the Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2023.
These rules laid the groundwork for establishing the GST Appellate Tribunal (GSTAT) by setting clear parameters for the eligibility, appointment, tenure, and service conditions of the President and Members of the Tribunal.
In furtherance of this progress, the Ministry of Finance has now notified the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, signaling a significant advancement towards the full operationalization of GSTAT across India.
The GSTAT Rules, 2025 govern the filing of appeals, conduct of hearings, issuance of orders, and the administrative functioning of the Tribunal, ensuring a more efficient, transparent, and robust dispute resolution mechanism. Together, the GSTAT Rules of 2023 and 2025 represent a landmark step in operationalizing GSTAT across the country, bringing much-needed reform to the GST appellate process.
This article analyzes the key features of the GSTAT Rules, 2025, highlighting the major changes and important considerations that taxpayers and legal practitioners must take note of.
Structure of the Tribunal and Key Considerations
The GSTAT is set to comprise one National Bench located in New Delhi, along with 31 State Benches spread across India, ensuring pan-India accessibility. This represents a considerable expansion over the structure of the erstwhile Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), which had only one principal bench and eight regional benches.
The National Bench will be presided over by the President of the Tribunal, supported by one Judicial Member (State) and one Technical Member (Centre). This Bench will primarily handle issues related to the place of supply under GST. On the other hand, the state benches will consist of two judicial members and two technical members—one each from the Centre and the State—enabling them to focus on state-specific appeals. The approach behind this structure is designed to ensure a comprehensive, unbiased, and efficient resolution of appeals.
Currently, the process of appointing judicial and technical members is underway, with the Tribunal’s operationalization expected soon.
Key Features of the GSTAT (Procedure) Rules, 2025
The GSTAT Rules, 2025 are comprehensive, well-structured, and aim to streamline the dispute resolution process. The rules are organized into fifteen chapters, each addressing a specific aspect of the Tribunal’s operations. Below are some of the most significant features:
1. Digital-First Approach: Integration with the GST Portal
Chapter XIV of the GSTAT Rules outlines the emphasis on digitalization to enhance transparency and efficiency. All appeals, applications, and interlocutory applications must be filed electronically through the GSTAT portal. While the portal is still under development, it is expected to offer a range of advanced features, including AI-powered e-filing, case tracking, Distinguished Management System (DMS), and Case Information System (CIS). Additionally, user guides and educational webinars will support the portal’s functionality.
However, Rule 19 has introduced some ambiguity by also mentioning physical filing. The lack of clarity on when manual filing is permissible, despite the mandate for online submission, has caused some confusion in the industry.
2. Hybrid Hearings of Appeals
The GSTAT Rules also allow for hybrid or electronic hearings, subject to the approval of the President. This flexibility aims to improve accessibility and reduce costs, particularly for parties located far from the Tribunal’s physical locations. All proceedings will be conducted through the GSTAT portal, and recordings of the hearings will be available on the same platform.
3. Robust Procedural Framework
The GSTAT Rules incorporate several procedural features designed to streamline the appellate process:
- Dedicated Timelines: Respondents are given one month to file their replies, and the GSTAT has one month to pass a final order after the hearing concludes.
- Listing of Appeals: Urgent matters filed before 12:00 noon will be listed on the next working day, with some exceptions allowing cases to be listed on the same day with the Tribunal’s permission.
- Registrar’s Functions: Rule 15 clearly defines the Registrar’s powers, including day-to-day administration, managing appeals, and overseeing summons and inspections.
- Recusal Provisions: The President or any member can recuse themselves from a case involving personal conflicts, ensuring fairness in adjudication.
4. Detailed Rules for Record Inspection, Preservation, and Translation
- Inspection of Records: Chapter VIII establishes a formal procedure for inspecting case records, subject to written application and the payment of requisite fees. This process ensures greater transparency in the proceedings.
- Preservation of Records: The GSTAT Rules mandate the preservation of documents and records for five years after the final adjudication of the case. Once this period expires, the records may be destroyed by the Registrar.
- Translation of Documents: Any document in a regional language must be accompanied by an English translation. This will ensure greater accessibility and understanding of the proceedings for all stakeholders.
IV. GSTAT vs. CESTAT: A Procedural Leap
The GSTAT Rules, 2025 represent a more sophisticated and codified framework compared to the older CESTAT Rules. Several features of the GSTAT Rules highlight the shift towards more streamlined and transparent procedures:
- Cross-Examination: While the GSTAT Rules allow cross-examination of deponents on points of conflict, the procedures surrounding cross-examination remain unclear. The rules do not specify in what circumstances parties can request cross-examination or the procedures for conducting such examinations, leaving room for interpretational issues.
- Expert Panels: The GSTAT Rules allow the Tribunal to empanel experts to assist in complex cases, a feature not present in the CESTAT framework. This will bring specialized expertise to niche matters, improving the quality of decision-making.
- Suo Moto Document Summoning: The Tribunal has the authority to summon documents suo moto and mark them for reference during proceedings. This ensures that the tribunal has complete access to relevant records to make informed decisions.
V. Key Open Issues and Areas of Concern
While the GSTAT Rules bring significant improvements to the dispute resolution process, several issues remain unclear, potentially leading to interpretational challenges:
1. Cross-Examination Ambiguities
The absence of clarity regarding the circumstances under which cross-examination is allowed or requested poses a challenge. Further administrative guidance is needed to address these uncertainties.
2. Conflict of Opinion in Benches
Rule 50 of the GSTAT Rules, which deals with differing opinions among bench members, contrasts with Section 109(9) of the CGST Act, 2017, creating confusion about how such differences should be resolved.
3. Filing of Counter and Rejoinder Replies
The Rules allow the Respondent to file a reply and the Appellant a rejoinder. However, it remains unclear whether these filings will require prior approval from the bench or follow a routine process.
4. Appearance Restrictions
The restriction on legal practitioners appearing in cases where they have previously advised or represented opposing parties requires further clarification regarding enforcement mechanisms.
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