Hundreds of appeals filed under the Goods and Services Tax (GST) regime in Gujarat have been languishing for as long as seven years, with no hearings conducted, severely impacting traders’ ability to do business.
According to sources in the State Goods and Services Tax (SGST) department, more than 700 to 1,000 appeals — primarily involving rejected GST registration applications — remain unheard. Without valid registration, traders cannot operate legally, cutting off both their income and the state’s revenue stream.
In addition, another 1,500 appeals related to tax recovery, penalties, and administrative delays are also awaiting resolution. Most of these cases are pending in Ahmedabad, the state’s commercial hub.
No tribunal, no hearings
Senior SGST officials have cited the absence of a GST Tribunal as the primary reason for the backlog. Although the central government framed tribunal rules two months ago—nearly eight years after GST was rolled out—no judges have been appointed yet.
Deputy commissioners, including Chief Commissioner Rajiv Topno, Special Commissioner Bharti, and HC Herma, have stated that until the tribunal is constituted, appeal hearings cannot be conducted.
Heavy penalties, frozen funds
The delays have also hit traders whose goods were seized under Sections 129 and 130 of the SGST Act. Under these provisions, steep penalties are levied for violations such as incomplete documentation during transport.
Section 129: Traders must pay a 100% penalty. For instance, if goods worth ₹100 incur 18% tax, they must pay ₹36 (tax + penalty) to get them released.
Section 130: Traders are required to pay ₹154 on ₹100 worth of goods—₹54 in tax and penalty, and ₹100 for the value of the goods.
These amounts are non-refundable unless the trader wins the appeal—leaving crores of rupees locked in the system.
Transporters caught in the crossfire
The delay is also taking a toll on transporters. When goods-carrying vehicles are seized, they’re often parked for months at storage lots in Changodar, Sanathal, and Ramol. Even when traders appear and pay 25% of the penalty to file an appeal, their goods and trucks are not released unless the entire demand is cleared.
As a result, transporters face mounting parking fees (₹200 per day) and loan defaults due to vehicles being stuck indefinitely. Though the law states the transporter’s responsibility ends once the trader comes forward, poor infrastructure and lack of storage facilities force the department to hold on to the vehicles.
Section 130: Traders are required to pay ₹154 on ₹100 worth of goods—₹54 in tax and penalty, and ₹100 for the value of the goods.
These amounts are non-refundable unless the trader wins the appeal—leaving crores of rupees locked in the system.
Staff shortage worsens situation
The SGST department has been operating under severe staff shortage for over 18 months. With limited officers available to handle both ongoing assessments and appeal cases, even basic post-registration changes—like address updates—take months.
Despite traders’ mounting frustrations and economic losses, no interim solution has been implemented to expedite hearings or resolve smaller cases administratively.
Source from: https://english.gujaratsamachar.com/news/business/seven-years-on-over-700-gst-appeals-still-pending-in-gujarat
