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Published on:
February 23, 2023
By
Prerna

Dispute Resolution under GST Regime in India

Goods and Services Tax (GST) was introduced in India on July 1, 2017, with the aim of simplifying the tax structure and bringing about uniformity in the tax rates across the country. However, disputes can arise under the GST regime due to various reasons such as incorrect calculation of tax liability, incorrect classification of goods and services, and non-compliance with the provisions of the GST Act.

Types of Disputes under GST

Under the GST regime, disputes can arise at various stages such as registration, payment of taxes, availing input tax credit, and filing of returns. The following are the different types of disputes that can arise under GST:

1. Interpretational Disputes: These disputes arise when there is a difference of opinion between the taxpayer and the tax authorities regarding the interpretation of the provisions of the GST Act.

2. Classification Disputes: These disputes arise when there is a dispute between the taxpayer and the tax authorities regarding the classification of goods and services for the purpose of levy of tax.

3. Valuation Disputes: These disputes arise when there is a dispute between the taxpayer and the tax authorities regarding the valuation of goods and services for the purpose of levy of tax.

4. Procedural Disputes: These disputes arise when there is a dispute between the taxpayer and the tax authorities regarding the procedural aspects of the GST Act such as registration, payment of taxes, availing input tax credit, and filing of returns.

5. Compliance Disputes: These disputes arise when there is a dispute between the taxpayer and the tax authorities regarding the non-compliance of the provisions of the GST Act.

Process of Dispute Resolution under GST

Dispute resolution under the GST regime involves the following steps:

1. Informal Resolution: The taxpayer can first approach the tax authorities for an informal resolution of the dispute. This can be done by filing an application in Form GST DRC-03.

2. Formal Proceedings: If the dispute is not resolved informally, the taxpayer can initiate formal proceedings by filing an application in Form GST APL-01 with the Appellate Authority for Advance Ruling (AAAR).

3. Appeal to the Higher Authority: If the taxpayer is not satisfied with the order of the AAAR, he/she can file an appeal with the GST Tribunal within three months from the date of receipt of the order.

4. Appeal to the High Court: If the taxpayer is not satisfied with the order of the GST Tribunal, he/she can file an appeal with the High Court within six months from the date of receipt of the order.

5. Appeal to the Supreme Court: If the taxpayer is not satisfied with the order of the High Court, he/she can file an appeal with the Supreme Court within three months from the date of receipt of the order.

Role of Authorities in Dispute Resolution under GST

The following are the authorities involved in the dispute resolution process under the GST regime:

1. GST Council: The GST Council is responsible for making recommendations on issues related to GST, including dispute resolution.

2. Central Board of Indirect Taxes and Customs (CBIC): CBIC is responsible for the administration of GST in India. It is also responsible for the adjudication of disputes under the GST Act.

3. Appellate Authority for Advance Ruling (AAAR): AAAR is responsible for hearing appeals against the orders passed by the Authority for Advance Ruling (AAR).

4. GST Tribunal: GST Tribunal is responsible for hearing appeals against the orders passed by the lower authorities under the GST Act.

5. High Court: High Court is responsible for hearing appeals against the orders passed by the GST Tribunal.

6. Supreme Court: Supreme Court is responsible for hearing appeals against the orders passed by the High Court.

Conclusion

Dispute resolution under the GST regime is a complex process that involves various steps and procedures. It is important for taxpayers to understand the different types of disputes that can arise under GST and the process of dispute resolution. They should also ensure that they comply with the provisions of the GST Act to avoid any legal complications.

It is important for the authorities involved in dispute resolution to ensure that the process is transparent, efficient, and timely. This will help in enhancing the confidence of taxpayers in the GST regime and promoting voluntary compliance.

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Updated on:
March 16, 2024