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CA Final · Indirect Tax Laws · Appeals and Revision (GST)

Meridian Pharma Ltd. appealed to the State Bench of the GST Appellate Tribunal against an order covering two tax periods. The first period involves input tax credit of Rs 30 lakh and the second involves a penalty of Rs 15 lakh. A third issue in the same order involves tax of Rs 10 lakh. The appeal raises no question of law. Under Rule 110A, how is the Rs 50 lakh threshold in section 109(8) tested, and which Bench may hear the case?

The Rs 50 lakh limit is measured cumulatively over all issues and tax periods in the order appealed against. Here the total is 30 + 15 + 10, which is Rs 55 lakh, exceeding the threshold. Testing issues separately, or excluding the penalty, understates the amount and is incorrect.

  1. AEach issue and period is tested separately; no issue exceeds Rs 50 lakh, so a single Member Bench may hear it
  2. BThe cumulative amount across all issues and tax periods in the order is Rs 55 lakh, so it exceeds the threshold and the single Member Bench is not available on that basisCorrect
  3. COnly the tax of Rs 10 lakh is counted, so a single Member Bench may hear it
  4. DOnly input tax credit and tax are counted, being Rs 40 lakh, so a single Member Bench may hear it

Explanation

Rule 110A(4) says the cumulative tax or input tax credit involved, or the amount of fine, fee or penalty, is determined with reference to all issues and all tax periods covered in the order appealed against. Here 30 + 15 + 10 = Rs 55 lakh, which exceeds Rs 50 lakh. Testing each issue separately, or leaving out the penalty, understates the amount and is wrong.

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