GSTAT Constitutes Benches Nationwide and Establishes Three-Tier Case Classification System

The Goods and Services Tax Appellate Tribunal (GSTAT), Principal Bench, New Delhi, has taken a significant institutional step by issuing Office Order No. 3/GSTAT/PB/2026 dated 14 May 2026, formally establishing benches across multiple States and Union Territories and introducing a structured three-category framework for classifying and managing GST appeals. This development marks a major milestone in operationalizing the appellate infrastructure envisaged under the CGST Act, 2017.

Basis Under the CGST Act and Rules

The order draws its authority from two primary provisions:

  • Section 109(8) of the CGST Act, 2017 — which empowers the GSTAT to constitute benches and determine their composition and jurisdiction.
  • Sub-rule (1) of Rule 110A of the CGST Rules, 2017 — which permits matters involving a tax liability or other issues valued below ₹50 lakhs, and not involving any question of law, to be listed before a Single Bench, subject to prior scrutiny and approval by the President of GSTAT or the Vice-President of the concerned State Bench.

Additionally, Sub-rule (2) of Rule 110A provides that if a Single Bench, while examining such a matter, forms the view that a question of law may be involved, it must record reasons in writing and refer the appeal back to the Division Bench, again with the approval of the President or the relevant Vice-President.

Removal of Difficulties Under Rule 123

Recognizing that practical challenges could arise in the initial formation and operation of benches, the President of GSTAT invoked Rule 123 of the Goods and Services Tax Appellate Tribunal (Procedure) Rules, 2025, which authorizes the President to pass appropriate orders for the removal of difficulties.

Exercising this power, the President directed that all pending matters as well as all future filings before both the Principal Bench and the State Benches shall be placed first before a Division Bench. A matter may only be routed to a Single Bench if the Division Bench specifically records a finding — with reasons — that no question of law is involved, and thereafter places the matter before the President or the Vice-President for appropriate directions.

This approach ensures uniformity in initial listing and prevents premature diversion of legally complex matters to Single Benches.

Three-Category Classification of GST Appeals

One of the most operationally significant aspects of Office Order No. 3/GSTAT/PB/2026 is the classification of all GST appellate matters into three distinct categories — Category I, Category II, and Category III — based on the nature and subject matter of the dispute.

Category I: Core Tax Determination Issues

Category I covers appeals that go to the heart of substantive tax liability and legal interpretation. These include:

  1. Misclassification of goods, services, or both
  2. Incorrect application of any notification issued under the CGST Act, 2017
  3. Wrong determination of the time of supply of goods or services or both
  4. Incorrect ascertainment of the value of supply of goods or services or both
  5. Disputes over admissibility of Input Tax Credit (ITC) — including denial, blocking, or incorrect crediting
  6. Incorrect determination of liability to pay tax on any goods or services or both
  7. Whether the assessee was required to obtain registration or has been granted suo moto registration
  8. Whether a particular activity undertaken by the assessee constitutes a supply of goods or services or both
  9. Determination of tax not paid or short paid on outward supply under Section 73 of the CGST Act, 2017
  10. Excess ITC availed or utilized under Section 73
  11. Cases involving fraud or willful suppression of facts resulting in non-payment or short payment of tax, determined under Section 74
  12. Excess ITC availed or utilized, determined under Section 74

Category II: Registration, Refund, Assessment, and Recovery Matters

Category II encompasses procedural and administrative disputes arising from registration, refund claims, assessment orders, and recovery proceedings. These include: