GST Appellate Tribunal (GSTAT) /What is Revenue Neutral Rate (RNR)?

The GST Appellate Tribunal represents a specialised authority formed to resolve GST-related disputes at the appellate level. It will be the forum of second appeal under GST laws and is the first common forum of dispute resolution between the Centre and the states.

Composition:

·   GST Appellate Tribunal Composition includes a National Bench situated in New Delhi and constituting the President (Head), a Judicial Member, and Technical Members, one from the state and another from the Centre.

·  There may be state benches consisting of two Judicial Members, a Technical Member (Centre) and a Technical Member (state).

Power:

·   The Tribunal is not bound by the Code of Civil Procedure, 1908, but follows the principles of natural justice and has the authority to regulate its own procedure.

·  The Tribunal possesses powers similar to a civil court under the Code of Civil Procedure, 1908, for matters such as summoning individuals, demanding document production, and receiving evidence on affidavits.

Members:

·  The government selects members for the GST Appellate Tribunal, including a Judicial Member and two Technical Members (one for the Centre and one for the state).

·   The president must be a Supreme Court judge or have served the High Court as the Chief Justice to be considered for the GST Appellate Tribunal.

·  The Judicial member must be a High Court Judge or has served as an Additional District Judge or a District Judge for a period of 10 years.

What is Revenue Neutral Rate (RNR) ?

·   It is the rate at which tax revenue remains the same despite giving credit of duty paid on inputs and other factors.

·    It is the rate of tax that allows the Government to receive the same amount of money despite changes in the tax laws.

·   The government of India had appointed a committee which is headed by Dr. Arvind Subramanian. Committee had released a detailed report on the calculation of RNR and the tax structure. RNR is calculated by the committee with three different approaches-:

Macro approach-:

·   RNR is calculated on basis of total data for domestic output/net imports and consumption of capital inputs. GST has a positive rate and zero rates on exports are two assumptions under this approach. RNR found to be 11.6% after factoring compliance of GST at 80%.

Indirect tax turnover approach-:

·   This Approach was shared by NIPFP(National Institute of Public Finance Policy). There are three steps under this approach-:

·   Estimate goods revenue base at the state level.

·    Estimate the services revenue base at the national level.

·    Adjustments for certain goods & services not to be taxed under GST.

·   This approach puts the RNR at 18.86%.

Direct tax turnover approach:

·  The approach was shared by the Thirteenth Finance Commission. RNR is calculated on the basis of input tax data of all the registered entities. This approach puts the RNR at 11.98 %. RNR is likely to be selected around 18% after making few changes to the indirect tax turnover approach.