Proposal for National tax tribunal by utilizing existing capacities and infrastructure.

CENTRAL EXCISE, CUSTOMS AND GOLD (CONTROL) BAR ASSOCIATION

[Registered under the Societies Registration Act, 1860]

(Bar Room: West Block-II, 1^st Floor. R.K. Puram, New Delhi - 110066)

Dated: 21.06.2022

To:

1. Shri Narendra Modi,

Hon'ble Prime Minister of India, Pradhan Mantri Karyalaya,

South Block, New Delhi -110001.

2. Smt. Nirmala Sitharaman,

Hon'ble Finance Minister of India, Ministry of Finance, North Block New Delhi -110001.

Respected Dignitaries,

Reg: Proposal for National tax tribunal by utilizing existing capacities and infrastructure.

At the outset, in my capacity as President and founder member of the Central Excise, Customs and Gold Control Bar Association (ECGC Bar) would like to commend and congratulate you for your efforts in successful implementation of farsighted tax reform of bringing in GST in 2017. The results now after five year of implementation are for the whole world to see. India has now, not only become an example for many to emulate such tax reforms, but has also shown how through federal collaboration ease of business can be provided while garnering more revenue without any pain for law abiding tax payer.

Next, I count myself privileged to presently head one of the oldest tax tribunal bar association on indirect taxes representing indirect tax advocates and tax practitioner since 1982 i.e. when Customs, Excise and Gold Control Appellate Tribunal was formed (now known as Customs, Excise and Service Tax Appellate Tribunal - CESTAT for short). The association has some of the best minds having legal and tax acumen, authors and thinkers on indirect taxes as its members for the last four decades and has been instrumental in recommending tax policy changes which were accepted by respective Governments of the day in their budgets or otherwise.

Even the tribunal of which this association is a part, has been upholding the value of strong legal and fiscal learning, efficiency and integrity. The Bar has also played well its role over decades to encourage young talent, updating knowledge in its peers and tax fraternity. It has also acted as a watch dog to defeat any nefarious designs of corruption or compromise, while maintaining high standards of legal competence. This along with acumen and expertise of its various successive Members and Presidents has made this Tribunal a shining example of being one of the best tribunal administering justice to the taxpayers as well as serving the interest of revenue. This was also partially achieved through in-house ability of departmental authorized officers representing the cases as also using the outside assistance of standing and special counsels.

With these credentials and the bar being aware that the creation of National GST Tribunal as part of GST dispute resolution process is engaging attention both of the Council as well as the Central Government and the same may come about any time, after due deliberations by the GST Council. This association cannot not remain passive in making its suggestion to such a dynamic and innovative leaders having zeal to implement fresh ideas that are beneficial in all respects. Accordingly, it is suggest to kindly consider our suggestion to add on the work of National Tax tribunal of GST to present Customs, Excise and Service Tax tribunal (CESTAT) with necessary minimal fine tuning through requisite amendments in statutory provisions.

The provisions relating to creation of Tribunal as well as its composition and creation of Benches etc. are part of the statute (Section 109 to 114 of the CGST Act, 2017 and mutatis mutandis State and U.T. legislations). Based on considerations of economy and fiscal prudence, relevant expertise, existence of prior administrative structure and optional utilization of existence judicial and technical man power, it is humbly suggested that the present CESTAT be restructured to make it functional as the National GST Tribunal. Broadly, for this the only requirement will be of additionally taking a technical member from the States. It may kindly be noted that the national tax tribunal has to only deal with matters relating to place of supply and therefore, with the limited number of cases on the subject likely to come before it, CESTAT can be duly considered, with its present workload as a worthy candidate. Presently CESTAT is having one Bench each at following places i.e. Delhi, Ahmedabad, Allahabad, Bangalore, Chennai, Chandigarh, Hyderabad, Kolkata and Mumbai. Some or all of them can be designate to function as National Tax Tribunal for GST matters. CESTAT already has existing jurisdiction for Customs matters and of legacy of Service Tax and Central Excise matters. The Tribunal already has as its President a former High Court Judge with sufficient standing, apart from Members (Judicial) as well as Members (Technical) who are presently being recruited in accordance with Tribunal Reforms Act, 2021 and which apply uniformly to a number of tribunals. A little bit of fine tuning of the GST Act with minimal amendments with the approval of GST Council can easily fulfill the need of GST Tribunal as effective dispute resolution forum at apex level, which in any case are required to be supplemented by state level appellate tribunals to resolve other than 'place of supply' litigation. The following benefits will accrue to GST administration if proposal meets the approval of all concerned in the Council:

1. Utilization of existing infrastructure and expertise to easily man this tribunal with much lower extra cost (i.e. of one member in each bench only)

2. Utilization of existing capacities instead of creating new ones at heavy cost with lesser formal experience in Tribunalization.

3. Minimum tinkering or amendments of GST Law required to implement the proposal.

4. The existing Tribunal (CESTAT) already has expertise to deal exclusively with matters of classification and valuation which along with questions pertaining to place of supply can easily be entrusted to it through GST benches to be specifically created with addition of Member (State)

5. The questions pertaining to the place of supply alone may not justify the need of creation of separate National Tax Tribunal and CESTAT can easily be improvised to deal with the work of handling additional issues relating to classification which are all based upon Customs Tariff and for which the wherewithal exists with present Customs Tribunal i.e. CESTAT.

To accommodate the requirement of federal tax structure of GST, the aspirations of states can easily be met by just additionally recruiting Members (State) in the Benches to be formed within CESTAT. This will lead to a drastic cut in expenditure, especially when litigation on such issues initially is not going to be much.

It is profoundly hoped that yourselves will find the proposal worthy of your kind consideration and approval for discussion in the council meeting. As far as legal and administrative improvisations are concerned, your competent teams headed by GST council secretariat are capable of handling the same.

On our part I shall be too pleased, if so desired, to put forth our view point on any aspect to carry the proposal forward.

Thanking you,

Yours faithfully,

A. C. Jain,

(President), ECGC Bar Association

1st Floor, West Block No.2,

R. K. Puram, New Delhi-110066.

M-9810125788