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For businesses, tax professionals, and policymakers alike, it represents efficiency, transparency, and trust embedded into the system. The absence of a dedicated second-tier forum had long been a bottleneck. Without GSTAT, taxpayers were forced to approach the High Courts for appeals, which not only prolonged the resolution process but also resulted in uneven interpretations across jurisdictions and added significantly to the workload of the already overburdened courts. The GSTAT addresses this gap decisively by consolidating appeals under one roof, combining both judicial and technical expertise, and promising uniformity, speed, and certainty in rulings.
The GSTAT journey gained momentum in 2024 with the appointment of Sanjaya Kumar Mishra as its first President. Following the 50th GST Council meeting, the Principal Bench in New Delhi and 31 state and circuit benches were notified, laying the foundation for a nationwide tribunal network. Each bench will have two judicial and two technical members, representing both the Centre and the states. This ensures a balance of expertise and embeds cooperative federalism into decision-making, unlike the single-member benches under CESTAT.
However, some procedural uncertainties remain, particularly regarding how ‘identical questions of law’ will be identified and whether the ruling of one state bench will have binding force on others. Addressing these questions will be critical to ensure that the Tribunal fulfils its promise of uniformity and certainty.
GSTAT is a fully digital tribunal, built around an integrated e-filing platform and staggered filing schedule. Anticipating a high volume of appeals, the staggered rollout prevents technical bottlenecks and protects appellants from digital overload. All appeals must be filed by 30 June 2026, providing both certainty and finality.
Benefits of the structured rollout:
Accessibility has been balanced with efficiency through carefully crafted monetary thresholds. Taxpayers can appeal irrespective of the amount in dispute, but the Revenue may do so only where the disputed tax exceeds INR 20 lakh. Appeals below INR 50,000 may be refused to preserve judicial bandwidth.
Further, single-member benches will hear disputes under INR 50 lakh that raise no substantial question of law, while division benches will decide higher-value or complex cases. This tiered structure ensures that both value and legal significance filter disputes, optimising efficiency while safeguarding jurisprudential depth.
A significant change under GSTAT is the pre-deposit requirement. Taxpayers must now deposit 10% of the disputed amount in addition to any deposit already paid at the appellate level, representing an extra financial obligation compared to the previous regime. Additionally, pre-deposit is required even for penalty appeals, further emphasising compliance responsibility. Practical questions, however, remain, such as whether pre-deposits in reverse charge cases can be discharged via the credit ledger or how they will be adjusted when lower appellate authorities have already dropped part of the demand. These practical concerns will have significant implications for taxpayers’ cash flows.
Pertinently, the Government data starkly underscores the consistently low success rate of departmental appeals, with only a marginal improvement from 20.61% in FY17 to 28.74% in FY18. More strikingly, the success rate across judicial forums remained significantly subdued in FY18 with 27.66% before the CESTAT, 6.49% before High Courts, and a mere 1.14% before the Supreme Court, with a sharp decline in outcomes at higher levels of adjudication compared to the previous years.
These figures clearly indicate that a substantial proportion of departmental appeals fail to withstand judicial scrutiny. Against this backdrop, the requirement of substantial pre-deposits for accessing appellate remedies imposes an undue financial burden on taxpayers, particularly when the likelihood of departmental success remains demonstrably low.
In this context, the foundational principle that ‘Justice must not only be done but must also be seen to be done’ assumes critical importance. Conditioning access to appellate forums on significant pre-deposits despite the Department’s historically limited success, creates an imbalance in the tax litigation framework, eroding both the perception and reality of fairness. Procedural safeguards and fiscal prudence must be carefully balanced and the pursuit of revenue cannot override the taxpayer’s right to accessible and impartial adjudication.
Appeals against Principal Bench orders will lie directly to the Supreme Court, thereby promoting centralised doctrinal consistency. In contrast, appeals from State bench orders would proceed through jurisdictional High Courts before reaching the Supreme Court, preserving federal judicial oversight but leaving room for divergent state-level interpretations until harmonised at the apex court. This dual-pathway structure, while streamlining dispute resolution, could influence the evolution of GST jurisprudence over time.
What sets GSTAT apart are the principles woven into its operation. Rulings are drafted in plain language to ensure accessibility. The e-Courts Portal supports virtual hearings, case tracking, and defect rectification, eliminating geographical barriers and improving transparency. Time-bound disposal is built into the system, with daily cause lists, restricted adjournments, and a statutory 30-day window for pronouncement of orders. Collectively, these measures transform GST dispute resolution from an aspirational reform into a functional, reliable reality. Yet, GSTAT’s success is contingent on resolving lingering uncertainties. The Tribunal’s inherent powers, such as staying collateral proceedings, recalling orders, or enhancing assessments, remain to be clarified. Operational alignment between the Centre and the states, particularly in appointments and registry staffing, will determine both its independence and efficiency. Addressing these gaps is essential to fulfilling the promise of timely, fair, and uniform adjudication.
Pertinently, the principle that ‘Justice must not only be done, but must also be seen to be done’ serves as a critical touchstone in designing a fair and effective appellate process. While pre-deposits play a legitimate and necessary role in this framework, functioning both as a deterrent against frivolous or vexatious litigation and as a means to protect government revenue during the pendency of appeals.
However, this legitimate purpose must be balanced carefully against the equally important need to ensure meaningful access to justice, particularly for taxpayers who face significant financial constraints. Reflecting on the erstwhile excise and service tax regime, where the second-level pre-deposit was capped at 10% inclusive of amounts already deposited, reflecting a measured approach that sought to harmonise these competing objectives.
By allowing credit for earlier deposits and imposing a capped cumulative pre-deposit, the system recognised both the State’s fiscal interests and the taxpayer’s right to pursue bona fide disputes without undue hardship. Emulating such a calibrated framework today, by setting a reasonable cap on total pre-deposits that factors in the Department’s historical success rates and the complexity of tax matters, would better uphold the integrity of the appellate system. This would ensure that fiscal discipline does not come at the cost of procedural equity, preserving public confidence in the tax justice mechanism and reinforcing the constitutional mandate of fair and accessible adjudication.
Overall, for businesses, GSTAT represents both an opportunity and a responsibility. MSMEs and exporters, most vulnerable to prolonged disputes, stand to benefit from faster resolution, liquidity relief, and reduced litigation stress. Enterprises must actively adapt to staggered filing windows, embrace e-filing, and build internal capabilities for defect management and virtual hearings. Proper preparedness ensures working capital is preserved, regulatory risk is reduced, and strategic growth can proceed with confidence.
In this sense, GSTAT goes beyond institutional reform to become an economic enabler, closely aligned with the PM's guiding principle of minimum government, maximum governance. Thus, the launch of GSTAT is not just an opportunity but a strategic responsibility. By institutionalising such preparedness, businesses can safeguard working capital, reduce litigation stress, and plan growth with greater confidence in a regime that is increasingly transparent, reliable, and business-friendly.
Shilpa Verma, Associate Director, Grant Thornton Bharat, has also contributed to this article with inputs from Ajay Jha, Assistant Manager, Grant Thornton Bharat
This article first appeared in The Economic Times on 1 November 2025.
