CBIC FIXED MONETARY LIMITS FOR FILING APPEALS OR APPLICATIONS BY THE DEPARTMENT BEFORE GSTAT, HIGH COURTS, AND SUPREME COURT.
In accordance with the 53rd GST Council recommendations the Central Board of Indirect Taxes and Custom (CBIC) issued Circular No. 207/1/2024-GST on June 26, 2024. This circular establishes new monetary limits for the Department’s filing of appeal before the appellate forums.
For appeals by the department filed on or after 26.06.2024:
Monetary Limits: Until & unless the monetary amounts are up to the following specified limits for their respective appellate forums, no appeal, application, or special leave petition should be filedby the department.
GST Appellate Tribunal: 20,00,000.
High Courts: 1,00,00,000.
Supreme Court: 2,00,00,000.
Determination of Monetary Limits: While determining whether the case falls within the above monetary limit or not, the following principles should be considered:
Where the dispute pertains to demand of tax including Interest & Penalty: The aggregate amount of only Tax should be considered (IGST/CGST/SGST/CESS) for applying the monetary limit for filing appeal.
Where the dispute pertains to demand of Interest only: The amount of Interest should be considered for applying the monetary limit for filing appeal.
Where the dispute pertains to demand of Penalty only: The amount of Penalty should be considered for applying the monetary limit for filing appeal.
Where the dispute pertains to demand of Late Fee only: The amount of Late Fee should be considered for applying the monetary limit for filing appeal.
Where the dispute pertains to demand of Interest, Penalty, Late Fee (Without involving any disputed tax): The sum total of Interest, Penalty, Late Fee should be considered for applying the monetary limit for filing appeal.
Where the dispute pertains to erroneous refund: The amount of refund in dispute including (IGST/CGST/SGST/CESS) should be considered for applying monetary limit for filing an appeal.
Where a composite order is issued which disposes more than one appeal/demand notice: The amount of Tax, Interest, Penalty, Late Fee shall be considered aggregately and not on the basis of individual appeal/demand notice for applying monetary limit for filing appeal.
Exclusions of applicability of monetary limits: Monetary limits specified above for filing an appeal shall be applicable to all cases, except in the following circumstances where the decision to file an appeal shall be taken on the merits irrespective of their monetary limits.
Where any provision of IGST, CGST, SGST or GST Act has been held as ultra vires (prohibited by) the authority of Constitution of India.
Where any Rules, regulations made under IGST, CGST, SGST or GST Act has been held ultra vires the Parent Act.
Where any order, notification, instruction, circular issued by the govt or the board has been held ultra vires IGST, CGST, SGST or GST Act or the Rules made thereunder.
Where any matter is related to: –
Valuation of Goods or Service;
Classification of Goods or Service;
Refunds;
Place of Supply;
Any other issue,
which is recurring in nature or involves interpretation of the provisions of the Acts, Rules, Notification, Circular, Order, Instruction etc.
Where adverse comments have been passed or cost has been imposed against Government/Department Officer.
Any other case where the board thinks is necessary to contest in the interest of justice in revenue.
An Appeal should not be filed merely because the disputed amount surpasses the specified limit. Merits of the case should also be considered. However, the primary objective of the officer is to reduce the unnecessary litigation and to give the taxpayer a certainty of the tax assessment.
If an appeal is not filed due to the disputed amount being lower than the specified limit, such cases cannot be set as a basis for future similar cases. The reviewing authority must explicitly state “even though the decision is not acceptable, appeal is not being filed as the amount involved is less than the monetary limit fixed by the Board”.
The decision not to appeal a case due to the tax amount being lower than the specified limit does not prevent tax officers from appealing or filing applications in future cases involving similar issues, if the tax amount exceeds the limit or if there are legal questions involved.
The decision not to appeal a case due to the low tax amount does not mean the tax department agrees with the decision. In case any prior order is being cited or relied upon by the taxpayer, claiming that the same has been accepted by the department, it must be checked thoroughly. Even if the said claim of taxpayer is true, the same cannot be set as a basis for future cases. Each case should be judged independently.
SW Point of View:With this introduction of monetary caps for filing appeals, the GST council aims to reduce the unnecessary litigations, focus more on the significant cases with bigger sums & saving business and department’s time and resources. However, it can be a discouragement for smaller business with smaller amounts to file an appeal, therefore its essential to manage a balance between reducing tax litigation for bigger taxpayers as well as protecting rights of smaller taxpayers.
