Centre is Planning to Set Up a GST Dispute Resolution System

Seep Gupta
Seep Gupta at March 06, 2023

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GST Dispute Resolution System

The Finance Ministry is working on the idea on setting up a detailed GST dispute resolution mechanism that can resolve complex GST (Goods and Service Tax) related disputes raised by states while avoiding distortions in the tax regime. This mechanism of GST dispute redressal system will be discussed with states in the next meeting of GST council that will held in june.

About GST Dispute Redressal Bench

The plan will include a GST dispute resolution bench that will have representation from both the central and state governments and also from independent lawyers and tax professionals who are pundits and well versed in law and economics. There will be detailed guidelines on which cases can be referred to the GST dispute redressal system. The need for such mechanism arose when Supreme Court recently said that the recommedations of GST council are not binding on states or on centre anymore.

This idea of GST dispute resolution redressal system that some states are demanding is under discussion. Once the draft will be ready, the council wil ltake the final call. There is the provision of voting in the GST legislation to resolve disputes. The centre has the one-third vote while states have the remaining two third votes. A decision will be passed when at least three-fourths of the majority will vote in the favour of it.

The GST council has set up the group of ministers (also known as GoMs) to address and to resolve the differences between different states that arose due to the levying of different taxes and GST rates rationalisation. Through this method, all the differences have been resolved except the one which the council decided by voting. The dispute redressal bank has the power and authority to take up independent cases too that are beyond the influence of the centre.

Supreme Court Ruling

The centre is anticipating more GST disputes and grievances from the 1st of July and without an acceptable method it will become quite hard for the centre to manage all the grievances. A uniform and even GST dispute redressal mechanism is very important. Because of the Supreme Court ruling on the ocean freight imports, this has further compelled the centre to speed up the idea and process of GST dispute redressal system.


However, the centre till yet has not taken up any decision, they are currently studying and pondering over the matter. And the further decision will only be taken after having further detailed discussion with the GST council.

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