Dispute Resolution Mechanism under GST: formula sheet

Key formulas

Questions allowed (section 97(2))

(a) classification; (b) applicability of a notification; (c) time and value of supply; (d) admissibility of ITC; (e) liability to pay tax; (f) whether registration is required; (g) whether a thing done amounts to a supply

Seven heads. A question outside these heads cannot be raised. Remember them as C-N-T/V-I-L-R-S.

Application and fee

FORM GST ARA-01 on the common portal; fee ₹5,000

Rule 104. Signed in the manner given in rule 26.

Time limit for ruling

Ruling in writing within 90 days of receipt of application

Section 98(6).

Admit or reject

Order admitting or rejecting after hearing; no rejection without hearing; reasons must be stated

Section 98(2). Do not admit if the question is already pending or decided in any proceedings in the applicant's case under the Act.

Binding effect

Binds the applicant and the concerned/jurisdictional officer in respect of the applicant, unless law, facts or circumstances change

Section 103(1) and (2).

Difference among members

Members differ: state points of difference and refer to the Appellate Authority

Section 98(5).

Appeal fee

Applicant: FORM GST ARA-02, ₹10,000; officer: FORM GST ARA-03, no fee

Rule 106.

Appeal by applicant (Rule 106(1))

FORM GST ARA-02 + fee ₹10,000, filed on the common portal

Fee is deposited in the manner specified in section 49. The appeal is against a ruling issued under section 98(6).

Appeal by officer (Rule 106(2))

FORM GST ARA-03, no fee

Filed by the concerned officer or the jurisdictional officer referred to in section 100.

Signing of appeal (Rule 106(3))

Officer: signed by an officer authorised in writing by that officer. Applicant: signed as per rule 26

Applies to the appeal, its verification and the accompanying documents.

Order of Appellate Authority (Section 101(1)-(2))

Hearing, then confirm or modify the ruling; order within 90 days of filing the appeal

The 90 days run from the date of filing the appeal under section 100 or a reference under section 98(5).

Difference of opinion (Section 101(3))

Members differ, so deemed that no advance ruling can be issued on that question

Applies to points in the appeal or reference.

Copy of ruling (Section 101(4))

Sent to applicant, concerned officer, jurisdictional officer and the Authority

The copy is duly signed by the Members and certified as prescribed.

Appeal to National Appellate Authority (Section 101B)

Conflicting rulings of two or more States/UTs: 30 days for applicant; 90 days for authorised officer; condonation up to a further 30 days

Time is counted from communication of the last of the conflicting rulings. The applicant must be a distinct person under section 25.

Void ruling (Section 104)

Fraud, suppression of material facts or misrepresentation, so ruling void ab initio after a hearing

The period from the ruling to the void order is excluded when computing limits under sections 73, 74 and 74A.

Time limit: Appellate Authority

File within 3 months from the date the order is communicated; delay of up to 1 month may be condoned

Applies to the taxpayer. The condonation period is a maximum, and the authority needs sufficient cause.

Pre-deposit: Appellate Authority

Admitted tax in full + 10% of the remaining disputed tax

The 10% part is capped at ₹25 crore under each tax head (CGST, SGST and IGST). These figures come from section 107, which is not in the text supplied here, so confirm them from the Act.

Time limit: Tribunal

File within 3 months from the date the order is communicated; further delay of up to 3 months may be condoned

These periods come from section 112, which is not in the text supplied here, so confirm them from the Act. Cross-objections by the respondent have a separate shorter period; revise from the Act.

Pre-deposit: Tribunal

Admitted tax in full (already paid at the first appeal, so not paid again) + 20% of the remaining disputed tax. The 20% is payable on top of the 10% paid at the first appeal.

Total across both stages = admitted tax + 10% + 20% of the disputed tax. The 20% part is capped at ₹50 crore under each tax head (CGST, SGST and IGST). These percentages and caps are taken from section 112, which is not in the text supplied here, so confirm them from the Act.

Forms

Appellate Authority: FORM GST APL-01 | Tribunal: FORM GST APL-05 | Revenue application to Tribunal: FORM GST APL-07 | Acknowledgment: APL-02

Withdrawal is by FORM GST APL-05/07W under Rule 113A.

Single Member bench (section 109(8))

Tax/ITC/fine/fee/penalty determined in the order appealed against does not exceed ₹50 lakh AND no question of law → single Member, with the President's approval

The test uses the amount in the order appealed against, not the balance in dispute. All other appeals: one Judicial Member and one Technical Member.

Tribunal disposal (section 113(4))

Hear and decide, as far as possible, within 1 year from filing

This is a directory target ('as far as possible'), not a hard bar.

Adjournments (section 113(2))

Maximum 3 adjournments to a party, for sufficient cause and reasons recorded in writing

A fourth adjournment cannot be granted to that party.

Rectification (section 113(3))

Error apparent on the record: within 3 months of the order

If the amendment increases liability or reduces refund or ITC, the party must first be heard.

Grounds for revision, section 108(1)

Order of subordinate officer + erroneous + prejudicial to revenue + (illegal or improper, or material facts not considered)

Revision is also possible in consequence of a CAG observation. A hearing must be given to the person concerned.

Bars on revision, section 108(2)

No revision if: (a) order subject to appeal under s.107, 112, 117 or 118; (b) s.107(2) period not yet expired, or more than 3 years since the order; (c) already revised earlier; (d) order itself passed under s.108(1)

Proviso: on a point not raised and decided in the appeal, revision is allowed before the later of one year from the appeal order or the three-year period.

Effect of revision order

Final and binding, subject to sections 113, 117 and 118

Section 108(3). Stay periods and pending higher appeals are excluded from the three years under sub-sections (4) and (5).

High Court appeal, section 117

Time limit = 180 days from receipt of order; Form GST APL-08; only if substantial question of law

Delay can be condoned for sufficient cause. Bench of at least two Judges.

Supreme Court appeal, section 118

From (a) Principal Bench order, or (b) High Court judgment under s.117 that the High Court certifies as fit for appeal

Code of Civil Procedure, 1908 applies as far as may be.

Forms

RVN-01 (revision notice, Rule 109B); APL-04 (summary of revision order and statement of demand confirmed by High Court or Supreme Court, Rules 109B and 115); APL-08 (High Court appeal)

Remember which form goes with which stage.

Section 57: credits to the Fund

Fund = amount referred to in s.54(5) + income from investment + other monies received

Credited in the prescribed manner. The s.54(5) amount is the amount not paid to the claimant.

Section 58: utilisation

Sums credited are used by the Government for consumer welfare; separate accounts and an annual statement are kept

Form of the statement is prescribed in consultation with the CAG.

Rule 97(1): main credit rule

Credited = all amounts of duty / central tax / integrated tax / UT tax / cess + income from investment + other specified monies

This is the general rule. The 50% figures below are provisos to it, not the whole rule.

Rule 97(1) provisos: IGST and cess share

Deposit = 50% of IGST determined under s.54(5); and 50% of cess determined under s.54(5)

IGST is read with section 20 of the IGST Act; cess with section 11 of the Compensation Act.

Rule 97(2): payment to claimants

Amount credited, then ordered or directed to be paid to a claimant, is paid from the Fund

Order may come from the proper officer, appellate authority or court.

Rule 97(3): audit

Accounts maintained by the Central Government are audited by the CAG

Do not say the department audits itself.

Rule 97(5): Committee meetings

Meets as necessary, generally four times a year; at least 10 days' written notice; quorum: Chairman or Vice-Chairman plus minimum three other members

Proceedings are invalid without them.

Rule 97(7A): publicity share

Committee makes available to the Board 50% of the amount credited to the Fund each year, provided funds for consumer welfare activities of the Department of Consumer Affairs are not less than ₹25 crore per annum

For publicity or consumer awareness on GST. The ₹25 crore condition relates to the Department of Consumer Affairs' funds.

Rule 97(7): application screening

Committee does not consider an application unless inquired into in material details and recommended by the Member Secretary

A frequent objective-question point.

Quick revision

• Advance ruling is sought on a proposed or ongoing activity, before a dispute, and binds the applicant and the officer concerned.
• An applicant or officer unhappy with an advance ruling goes to the Appellate Authority for Advance Ruling.
• Match each order to its forum: ordinary orders go to the first Appellate Authority, then to the Tribunal.
• First appeals need a pre-deposit: the admitted tax plus a percentage of the disputed tax, subject to a cap. Check the current figures.
• An appeal to the Tribunal also needs a pre-deposit, a percentage of the disputed tax, with its own cap.
• Revision lets a senior officer review an order of a subordinate officer, and not every order qualifies.
• Appeals to the High Court and the Supreme Court lie only on a substantial question of law.
• Consumer Welfare Fund credits include 50% of the integrated tax determined under the refund provision, and 50% of cess determined under it.
• The Fund's accounts are audited by the Comptroller and Auditor General of India.
• The Standing Committee generally meets four times a year, with at least ten days' written notice to every member.
• A Committee proceeding is valid only if the Chairman or Vice-Chairman presides and at least three other members attend.
• A consumer welfare applicant agency must have been engaged in such work for a minimum of three years, though the Committee can relax this condition.

Common mistakes

• Saying an advance ruling binds all taxpayers in the same trade. Fix: Remember section 103(1): it binds only the applicant and the concerned or jurisdictional officer in respect of the applicant.
• Treating a ruling as binding forever. Fix: Add that it is binding unless the law, facts or circumstances supporting the original ruling have changed (section 103(2)).
• Saying the officer must pay the ₹10,000 fee too. Fix: Link the fee to ARA-02 only. Rule 106(2) says no fee is payable by the officer.
• Treating the 90 days of section 101 as the time limit to file the appeal. Fix: In section 101, 90 days is the period for the Appellate Authority to pass its order. Filing limits for section 101B are 30 and 90 days.
• Counting the three months from the date of the order instead of the date of communication. Fix: Read the question for 'communicated on' and count from that date.
• Calculating the 10% or 20% on the entire demand rather than on the remaining disputed tax. Fix: First subtract admitted tax, then take the percentage on the balance. At the first appeal add the admitted tax back. At the Tribunal the admitted tax is already paid, so count it only once in the total.
• Saying a taxpayer can file a revision application under section 108. Fix: Revision is the Revisional Authority's power, exercised on its own motion, on information, or on request from the State or UT Commissioner. The taxpayer's remedy is appeal.
• Allowing revision of an order that has already been appealed. Fix: If the order is subject to appeal under section 107, 112, 117 or 118, revision is barred. Only the proviso allows revision on a point not raised and decided in the appeal.
• Saying the whole refund claim of any taxpayer goes to the Fund. Fix: Only the amount referred to in section 54(5), the amount not paid to the claimant, is credited. What is payable to the claimant is paid to him.
• Treating the Fund as the department's own money for its expenses. Fix: The Fund is for consumer welfare. Under Rule 97(7A) the Committee makes available to the Board 50% of the amount credited each year for GST publicity or consumer awareness, provided funds for consumer welfare activities of the Department of Consumer Affairs are not less than ₹25 crore per annum.

Exam tips

• MCQs often test the list in section 97(2). Learn all seven heads and spot the odd one out.
• Remember the numbers: ₹5,000 application fee, 90 days for ruling, ₹10,000 appeal fee by applicant, no fee for the officer.
• In case questions, write who is bound. 'Only the applicant and the concerned officer' earns the mark.
• Always add the condition 'unless law, facts or circumstances have changed' when discussing binding effect.
• If asked who can apply, say registered persons and persons desirous of obtaining registration.
• Memorise the form-fee pairs: ARA-02 with ₹10,000 and ARA-03 with nil fee. MCQs often test this.
• Keep three different numbers apart: 90 days for the order, 30 days for an applicant's 101B appeal, 90 days for an officer's 101B appeal.
• In case questions, check for words like fraud, suppression or misrepresentation, and bring in section 104 with the hearing requirement.