Condition to file GST Appeals with an Example

Appeals under GST law went into a change for a provision through the Amendment Act 2018 applicable from 1st February 2019. For an appeal to be eligible, the aggrieved party must deposit a predetermined amount with the appellate authority the appeal is presented to. Post the GST (Amendment) Act 2018, a maximum cap has been set on the pre-fixed deposit.   

Latest Updates 

Union Budget 2025

Amendments in Section 107 and 112 of the CGST Act, 2017*

• Section 107(6) is being amended to provide for 10% mandatory pre-deposit of penalty amount for appeals before Appellate Authority in cases involving only demand of penalty without any demand for tax. 
• Section 112(8) is amended to provide for 10% mandatory pre-deposit of penalty amount for appeals before Appellate Tribunal in cases involving only demand of penalty without any demand for tax.

*The decision will apply once the relevant notification is issued.

Condition for Appeals: Pre-fixed deposit 

The aggrieved taxpayer who wishes to contend against the order of ‘GST Adjudicating Authority’ can file an appeal before the first appellate authority. But, the appeal must be filed within three months of receiving the order

For the appeal to be accepted, he must pay:

• Such part of tax demanded in the order that he admits being liable for; and
• 10% of the remaining part of tax demanded in the order as a pre-deposit amount or Rs. 25 crores, whichever is less.

Similarly, in case the taxpayer is not satisfied with the verdict passed by the first appellate authority, he may approach the appellate tribunal as a next resort, in the following three months. For the appeal to be accepted, he must pay:

• Such part of tax demanded in the order that he admits being liable for; AND
• 20% of the remaining part of tax demanded in the order as a pre-deposit amount or Rs. 50 crores, whichever is less. This will be in addition to what was deposited before the first appellate authority.

Please note, that the pre-fixed deposit amount shall be returned in case the aggrieved taxpayer is proven right through the proceedings. Likewise, under the IGST Act, for all the inter-state transactions, the maximum cap for the pre-deposit amounts is Rs. 50 crores and Rs. 100 crores before first appellate authority and appellate tribunal, respectively.

Example for finding out Pre-fixed Deposit

Let’s say: Mr.Ram is a dealer engaged in the business of selling computers online. He is served a notice by the Assessing Officer demanding Rs.50 lakhs. Mr.Ram agrees to pay Rs.34 lakhs as the tax amount with interest. However, for the remaining Rs.16 lakhs, he files an appeal before the first appellate authority. As mandated by the law, Mr.Ram must deposit Rs 1.6 lakhs i.e., 10% of Rs.16 lakhs or Rs.25 crores, whichever is less.