Section 109 of the Central Goods and Services Tax Act, 2017 deals with the constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) and its Benches.
The GST Appellate Tribunal is the second appellate level in the GST dispute-resolution framework. It provides a forum for appeals against orders passed by the Appellate Authority or Revisional Authority under the GST law. Section 109 establishes the Tribunal and explains how its jurisdiction, powers and authority are exercised through the Principal Bench and State Benches.
The present Section 109 reflects the substantial restructuring of the GST Appellate Tribunal framework through the Finance Act, 2023 and subsequent amendments, including changes made in 2024. The amended provisions came into operation in stages, with the substituted Section 109 effective from 1 August 2023.
What Is Section 109 of the CGST Act?
Section 109 is titled “Constitution of Appellate Tribunal and Benches thereof.”
Under the current provision, the Government, on the recommendations of the GST Council, establishes the Goods and Services Tax Appellate Tribunal (GSTAT) by notification.
The Tribunal hears appeals against orders passed by:
- the Appellate Authority; and
- the Revisional Authority.
Section 109 also contains a provision allowing the Tribunal to conduct examination or adjudication of matters referred to in Section 171(2), where the Government has notified the Tribunal for that purpose.
The jurisdiction, powers and authority of the Tribunal are exercised through:
- the Principal Bench; and
- State Benches.
Why Was GSTAT Created?
The GST system provides multiple levels of dispute resolution.
A simplified structure is:
Adjudicating Authority → Appellate Authority → GST Appellate Tribunal → High Court → Supreme Court
The Appellate Tribunal provides a specialised forum for GST-related appeals before matters involving substantial questions of law may reach the High Court.
Section 109 provides the institutional structure required for this appellate mechanism.
The GST Council has described GSTAT as the second appellate authority within the GST framework, dealing with appeals against orders of appellate and revisional authorities under the Central and State GST laws.
Establishment of GSTAT Under Section 109(1)
Section 109(1) provides that the Government shall, on the recommendations of the GST Council, by notification establish an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal.
The Tribunal is established with effect from the date specified in the relevant notification.
Its principal appellate function is to hear appeals against orders passed by:
- the Appellate Authority; and
- the Revisional Authority.
The provision also includes examination or adjudication of cases referred to in Section 171(2), if the Tribunal is notified for that purpose.
GST Appellate Tribunal and Section 171
Section 109(1) contains an additional reference to Section 171.
Section 171 concerns anti-profiteering measures.
The amended framework allows the Government to notify the Appellate Tribunal for conducting examination or adjudication of cases referred to in Section 171(2).
The GST Council’s 53rd meeting agenda specifically discussed the amendment enabling the Principal Bench of GSTAT to be notified for handling such anti-profiteering matters.
Therefore, Section 109 is not limited to ordinary appeals in every circumstance; it can also accommodate functions specifically assigned to the Tribunal under other provisions where the statutory requirements are satisfied.
Section 109(2) – Principal Bench and State Benches
Section 109(2) provides that the jurisdiction, powers and authority conferred on the Appellate Tribunal shall be exercised by:
- the Principal Bench; and
- the State Benches
constituted under Section 109(3) and Section 109(4).
This is an important change from the older GSTAT structure.
The present law is based on a Principal Bench plus State Benches model.
Principal Bench of GSTAT
Section 109(3) provides for a Principal Bench at New Delhi.
The Principal Bench consists of:
- President
- One Judicial Member
- One Technical Member (Centre)
- One Technical Member (State)
Therefore, the statutory composition of the Principal Bench is four members.
This composition is different from some earlier versions of Section 109 that contemplated a National Bench with a different member structure. The present provision reflects the amendments introduced through the Finance Act, 2023.
State Benches Under Section 109(4)
Section 109(4) provides that, on the request of a State, the Government may constitute State Benches at such places and with such jurisdiction as may be recommended by the GST Council.
A State Bench consists of:
- two Judicial Members;
- one Technical Member (Centre); and
- one Technical Member (State).
Thus, a State Bench normally has four members.
The statutory composition is intended to provide both judicial expertise and technical expertise in GST matters.
Why Are State Benches Important?
GST is a nationwide tax system, but taxpayers and tax authorities operate across different States and Union territories.
Having State Benches allows appeals to be dealt with closer to the jurisdiction from which the dispute arises.
This can help reduce the need for taxpayers from different parts of India to approach a single location for every GST appeal.
The actual location and jurisdiction of State Benches depend on the notifications issued by the Government under Section 109 and the recommendations of the GST Council.
Principal Bench and State Bench – Difference
| Basis | Principal Bench | State Bench |
|---|---|---|
| Location | New Delhi | Places notified by Government |
| Provision | Section 109(3) | Section 109(4) |
| Members | President + Judicial Member + Technical Member (Centre) + Technical Member (State) | Two Judicial Members + Technical Member (Centre) + Technical Member (State) |
| Main role | Appeals assigned to Principal Bench under law | Appeals falling within State Bench jurisdiction |
| Place of supply matters | Heard by Principal Bench | Not ordinarily heard by State Bench |
The distribution of cases is also subject to Section 109(5) and orders of the President under Section 109(6).
Section 109(5) – Jurisdiction of Principal and State Benches
Section 109(5) provides that the Principal Bench and State Benches hear appeals against orders passed by the Appellate Authority or Revisional Authority.
However, the provision contains important exceptions.
The first proviso states that cases in which any one of the issues involved relates to the place of supply shall be heard only by the Principal Bench.
This is particularly important because place-of-supply questions can have implications extending beyond a single State.
Place of Supply Cases – Principal Bench Only
Suppose an appeal involves a dispute over whether a particular supply is intra-State or inter-State, or otherwise involves an issue concerning place of supply.
If one of the issues involved in the case relates to place of supply, Section 109(5) directs that the matter be heard by the Principal Bench.
Therefore, a State Bench cannot ordinarily take jurisdiction over a case merely because the taxpayer is located in that State when the case contains an issue relating to place of supply.
Section 109(5) and Section 171 Matters
Section 109(5) also provides that matters referred to in Section 171(2), where applicable, shall be examined or adjudicated only by the Principal Bench.
The GST Council’s legislative agenda specifically records this provision in connection with the anti-profiteering framework.
Other Cases That May Be Assigned to the Principal Bench
Section 109(5) contains another enabling provision.
The Government may, on the recommendations of the GST Council, notify other cases or classes of cases that shall be heard only by the Principal Bench.
This gives the Government a mechanism to centralise specified categories of GST disputes where a uniform national approach may be considered necessary.
The power is subject to the statutory process and recommendation of the GST Council.
Section 109(6) – Distribution of Business
Section 109(6) provides that, subject to Section 109(5), the President of the Appellate Tribunal shall, from time to time, by general or special order:
- distribute the business of the Appellate Tribunal among the Benches; and
- transfer cases from one Bench to another.
This provision provides administrative flexibility in managing the Tribunal’s workload.
For example, if a particular State Bench has a large number of pending appeals, cases may be distributed or transferred in accordance with the statutory framework and the orders of the President.
Why Is Case Distribution Necessary?
A national appellate tribunal can receive cases involving:
- classification;
- valuation;
- input tax credit;
- refunds;
- demand and recovery;
- registration;
- penalties;
- place of supply;
- procedural issues; and
- other GST matters.
The workload may vary between Benches.
Section 109(6) therefore allows the President to distribute business and transfer cases, subject to the jurisdictional requirements of Section 109(5).
Section 109(7) – Vice-President of State Benches
Section 109(7) provides that the senior-most Judicial Member within the State Benches, as may be notified, shall act as the Vice-President for those State Benches.
The Vice-President exercises such powers of the President as may be prescribed, but otherwise continues to be treated as a Member.
This provision provides an internal administrative structure for State Benches.
Section 109(8) – Single-Member Bench
Section 109(8) provides for a special arrangement for certain smaller appeals.
An appeal may be heard by a single Member where:
- the tax or input tax credit involved; or
- the amount of fine, fee or penalty determined in the order appealed against
does not exceed ₹50 lakh, and
- the appeal does not involve any question of law.
Such hearing requires the approval of the President and is subject to conditions prescribed on the recommendations of the GST Council.
In other cases, the appeal is to be heard together by:
- one Judicial Member; and
- one Technical Member.
Why Does the Single-Member Provision Matter?
The single-member provision is designed for qualifying matters that fall below the statutory monetary threshold and do not involve a question of law.
For example, if an appeal involves a tax dispute of ₹30 lakh and does not involve any question of law, it may be eligible for consideration by a single Member, subject to the statutory conditions and approval requirements.
However, the ₹50 lakh threshold should not be understood as an automatic right to a single-member hearing. The provision specifically requires approval and compliance with prescribed conditions.
Appeals Involving Questions of Law
Where the statutory conditions for a single-member Bench are not satisfied, Section 109(8) provides that the appeal shall be heard together by:
- one Judicial Member; and
- one Technical Member.
This ensures that matters outside the single-member category receive consideration by a two-member Bench with judicial and technical expertise.
Section 109(9) – Difference of Opinion Between Members
A GSTAT Bench may sometimes have a difference of opinion between its Members.
Section 109(9) provides a mechanism for resolving such differences.
The Member must state the point or points on which the Members differ.
The President then refers the matter for hearing on those points.
The procedure differs depending on whether the original appeal was heard by:
- a State Bench; or
- the Principal Bench.
Difference of Opinion in a State Bench
Where the appeal was originally heard by Members of a State Bench, the President refers the matter to:
- another Member of a State Bench within the same State; or
- where no such other State Bench is available within that State, a Member of a State Bench in another State.
The disputed point or points are then decided according to the majority opinion, including the opinions of the Members who originally heard the case.
Difference of Opinion in the Principal Bench
Where the appeal was originally heard by Members of the Principal Bench, the President refers the matter to:
- another Member from the Principal Bench; or
- where no such Member is available, a Member of any State Bench.
Again, the disputed point or points are decided according to the majority opinion, including the opinions of the Members who first heard the case.
Example of Difference of Opinion
Suppose a State Bench consists of two Members.
One Member concludes that a particular transaction is taxable.
The other Member reaches a different conclusion.
They record the point of disagreement.
The President refers the disputed issue to another eligible Member under Section 109(9).
The resulting decision is determined according to the majority opinion, including the opinions of the original Members.
This prevents a two-member disagreement from leaving the appeal unresolved.
Section 109(10) – Transfer of Members
Section 109(10) provides that the Government may, in consultation with the President, transfer Members from one Bench to another for administrative efficiency.
There is an important proviso concerning a Technical Member (State).
A Technical Member (State) of a State Bench may be transferred to a State Bench only of the same State in which that Member was originally appointed, and the State Government must be consulted.
This provision allows administrative flexibility while protecting the State-specific position of a Technical Member (State).
👉 Read More → Section 110 – President and Members of Appellate Tribunal
Section 109(11) – Vacancy or Defect Does Not Automatically Invalidate Proceedings
Section 109(11) provides that no act or proceeding of the Appellate Tribunal shall be questioned or become invalid merely because:
- a vacancy exists; or
- there is a defect in the constitution of the Appellate Tribunal.
This provision prevents every procedural act of the Tribunal from automatically becoming invalid merely because a Member’s position is vacant or there is a constitution-related defect.
The provision is intended to preserve continuity of the Tribunal’s functioning.
How Is GSTAT Connected With Section 107?
Section 107 deals with appeals to the Appellate Authority.
Once the Appellate Authority passes an order, an aggrieved person may have a further right of appeal to the GST Appellate Tribunal under Section 112, subject to the statutory requirements.
Therefore:
Section 107 → Appeal to Appellate Authority
Section 108 → Revision by Revisional Authority
Section 109 → Constitution of GSTAT
Section 112 → Appeal to GSTAT
Section 109 therefore establishes the forum, while Section 112 deals with the right and procedure for bringing an appeal before that forum.
Section 109 and Section 110
Section 109 deals with the constitution and Benches of GSTAT.
Section 110 deals with the:
- President;
- Judicial Members;
- Technical Members;
- qualifications;
- appointment;
- conditions of service;
- tenure;
- resignation; and
- removal.
Therefore, Section 109 should be read with Section 110 when studying the institutional structure of GSTAT.
Section 109 and Section 111
Section 111 deals with the procedure before the Appellate Tribunal.
It provides that GSTAT is not bound by the procedure laid down in the Code of Civil Procedure, 1908, but is guided by the principles of natural justice and the CGST Act and Rules.
It also provides specified civil-court powers for GSTAT proceedings.
Thus:
Section 109 → Who constitutes the Tribunal and where its powers are exercised
Section 111 → How proceedings before the Tribunal are conducted
Section 109 and Section 112
Section 112 provides the statutory framework for appeals to the Appellate Tribunal.
It covers matters such as:
- persons entitled to appeal;
- limitation;
- cross-objections;
- condonation of delay;
- prescribed form and fee;
- mandatory payment before admission;
- stay of recovery of the balance amount; and
- applications before the Tribunal.
The Tribunal established under Section 109 is therefore the appellate forum to which Section 112 appeals are presented.
Section 109 and Section 113
Section 113 deals with orders of the Appellate Tribunal.
After hearing the parties, GSTAT may, subject to the statutory provisions:
- confirm the order;
- modify the order;
- annul the order; or
- remand the case for fresh adjudication or decision.
Section 113 also deals with rectification of errors apparent on the face of the record and the finality of Tribunal orders subject to further appeal under Sections 117 and 118.
Thus, Section 109 establishes the Tribunal, while Section 113 deals with what the Tribunal may do after hearing an appeal.
Section 109 and Place of Supply
Place of supply is particularly important under Section 109(5).
Where any one of the issues involved in a case relates to place of supply, the matter is to be heard only by the Principal Bench.
This gives the Principal Bench a specialised role in disputes involving place-of-supply questions.
Example
Suppose an appeal involves a dispute concerning whether a particular service should be treated as supplied in one State or another.
If the issue involves place of supply, Section 109(5) directs the matter to the Principal Bench.
Section 109 and Inter-State Transactions
Place-of-supply disputes can affect whether a transaction is treated as:
- intra-State; or
- inter-State.
They can also affect whether CGST and SGST/UTGST or IGST applies.
Because such issues can have implications beyond a single State, Section 109 centralises cases involving place of supply before the Principal Bench.
Establishment and Operationalisation of GSTAT
The GSTAT framework underwent substantial changes before becoming operational.
The Finance Act, 2023 substituted Sections 109, 110 and 114, and the substituted provisions were brought into force from 1 August 2023 through Notification No. 28/2023-Central Tax.
The Government subsequently issued notifications concerning the establishment and constitution of GSTAT Benches.
The GST Council’s 53rd meeting agenda records that State Benches had been constituted in various States and that the Principal Bench at New Delhi was notified in January 2024.
A June 2024 notification further established GSTAT with effect from 1 September 2023 and constituted the Principal Bench at New Delhi, along with State Benches specified in the notification.
The distinction between the statutory establishment date and the subsequent operationalisation or constitution of particular Benches is important. Taxpayers should therefore check the applicable notification when determining the forum and jurisdiction for a particular appeal.
GSTAT and the National Appellate Authority for Advance Ruling
The GSTAT Principal Bench also has a connection with the National Appellate Authority for Advance Ruling framework.
A 2026 notification empowered the Principal Bench of the Appellate Tribunal at New Delhi to hear appeals under Section 101B pursuant to the interim mechanism under Section 101A(1A). The notification states that this empowerment is effective from 1 April 2026.
This is a separate function from the ordinary appellate jurisdiction of GSTAT under Section 112 and should not be confused with the normal GST appeal mechanism.
Why the Principal Bench Is Important
The Principal Bench has several specifically assigned functions.
These include:
- hearing cases involving place-of-supply issues;
- hearing matters specifically assigned to it under Section 109(5);
- handling matters referred to it under the statutory anti-profiteering framework where applicable; and
- exercising its jurisdiction as the Principal Bench under the GSTAT structure.
It also serves as the central Bench at New Delhi for the national Tribunal framework.
Why State Benches Are Important
State Benches provide the territorial structure through which GSTAT can handle appeals arising from different States.
They are particularly relevant for disputes that do not fall within the categories reserved for the Principal Bench.
The State Bench structure therefore combines:
- local accessibility;
- judicial expertise;
- technical GST expertise; and
- a national appellate framework.
Practical Example – Ordinary Tax Dispute
Suppose a taxpayer receives an Appellate Authority order confirming a GST demand of ₹20 lakh.
The taxpayer is aggrieved and seeks to challenge the order before GSTAT.
The case would ordinarily be handled by the appropriate State Bench, provided it does not involve an issue that Section 109(5) reserves for the Principal Bench.
The appeal itself would be filed under Section 112.
Practical Example – Place of Supply Dispute
Suppose a taxpayer challenges an appellate order concerning the place of supply of services.
Because one of the issues relates to place of supply, Section 109(5) provides that the appeal is to be heard by the Principal Bench.
The taxpayer’s location alone does not change this statutory allocation of jurisdiction.
Practical Example – Small Appeal Without Question of Law
Suppose an appeal involves tax of ₹15 lakh and does not involve any question of law.
If the statutory conditions are satisfied and the President approves the arrangement, Section 109(8) permits the matter to be heard by a single Member.
The provision is therefore designed to provide a simplified Bench structure for qualifying appeals.
Practical Example – Difference Between Members
Suppose two Members hearing an appeal disagree about the classification of a product.
They record the point of difference.
The President refers that point to another Member under Section 109(9).
The issue is then decided according to the majority opinion, including the opinions of the original Members.
This mechanism allows the appeal to be resolved even when the original Bench has a difference of opinion.
Important Points About Section 109
The major points of Section 109 are:
- Section 109 deals with the constitution of the GST Appellate Tribunal and its Benches.
- The Tribunal is known as the Goods and Services Tax Appellate Tribunal (GSTAT).
- The Government establishes GSTAT on the recommendations of the GST Council.
- GSTAT hears appeals against orders of the Appellate Authority or Revisional Authority.
- Section 109 also permits certain Section 171 matters to be examined or adjudicated by GSTAT where specifically notified.
- The jurisdiction, powers and authority of GSTAT are exercised through the Principal Bench and State Benches.
- The Principal Bench is located at New Delhi.
- The Principal Bench consists of the President, one Judicial Member, one Technical Member (Centre) and one Technical Member (State).
- State Benches may be constituted on the request of a State at places and with jurisdiction recommended by the GST Council.
- A State Bench consists of two Judicial Members, one Technical Member (Centre) and one Technical Member (State).
- Place-of-supply cases are to be heard only by the Principal Bench.
- Certain Section 171 matters are also assigned to the Principal Bench.
- The Government may notify additional categories of cases to be heard only by the Principal Bench.
- The President distributes business among Benches and may transfer cases.
- The senior-most Judicial Member of notified State Benches acts as Vice-President for those State Benches.
- Appeals involving tax or ITC up to ₹50 lakh, or fine, fee or penalty up to that amount, and involving no question of law, may be heard by a single Member subject to statutory conditions and approval.
- Other appeals are heard by one Judicial Member and one Technical Member.
- Section 109 provides a mechanism for resolving differences of opinion between Members.
- Members may be transferred between Benches for administrative efficiency, subject to the statutory conditions.
- A vacancy or defect in the constitution of GSTAT does not by itself invalidate an act or proceeding of the Tribunal.
Section 109 – Important Comparison With Related Sections
| Section | Main subject |
|---|---|
| Section 107 | Appeals to Appellate Authority |
| Section 108 | Powers of Revisional Authority |
| Section 109 | Constitution of Appellate Tribunal and Benches |
| Section 110 | President and Members of Appellate Tribunal |
| Section 111 | Procedure before Appellate Tribunal |
| Section 112 | Appeals to Appellate Tribunal |
| Section 113 | Orders of Appellate Tribunal |
| Section 114 | Financial and Administrative powers of President |
| Section 115 | Interest on refund of amount paid for admission of appeal |
| Section 116 | Appearance by authorised representative |
| Section 117 | Appeal to High Court |
| Section 118 | Appeal to Supreme Court |
This sequence makes the structure of the GST appellate system easier to understand.
Conclusion
Section 109 of the CGST Act provides the institutional foundation for the Goods and Services Tax Appellate Tribunal (GSTAT). It establishes the Tribunal through a notification issued by the Government on the recommendations of the GST Council and provides for the exercise of its jurisdiction, powers and authority through the Principal Bench and State Benches.
The Principal Bench at New Delhi consists of the President, a Judicial Member, a Technical Member (Centre) and a Technical Member (State). State Benches can be constituted on the request of a State and consist of two Judicial Members, a Technical Member (Centre) and a Technical Member (State).
One of the most important provisions is Section 109(5), which provides that cases involving an issue relating to place of supply are to be heard only by the Principal Bench. The provision also assigns certain Section 171 matters to the Principal Bench and allows the Government to notify additional classes of cases for centralised hearing.
Section 109 also provides administrative and procedural mechanisms for the functioning of the Tribunal. The President can distribute business and transfer cases between Benches. The section provides for a single-member hearing in specified smaller appeals that do not involve a question of law, establishes a mechanism for resolving differences of opinion among Members, permits transfer of Members for administrative efficiency and protects Tribunal proceedings from being invalidated merely because of a vacancy or defect in its constitution.
The present GSTAT framework is substantially different from the original structure of Section 109. The Finance Act, 2023 substituted the provision, effective from 1 August 2023, and subsequent amendments and notifications further developed the Principal Bench and State Bench structure.
For taxpayers, Section 109 is important because it explains where and through which Bench a GST appeal is heard. However, Section 109 should be read together with Section 112, which governs appeals to the Tribunal, Section 111, which deals with procedure before GSTAT, and Section 113, which deals with orders of the Tribunal.
In short, Section 109 establishes the GST Appellate Tribunal and creates the Principal Bench and State Bench structure through which GSTAT exercises its appellate jurisdiction. It provides the organisational framework necessary for resolving GST disputes at the Tribunal level before further appeals, where legally available, proceed to the High Court or Supreme Court.
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