Concept of pre-deposit

Concept of pre-deposit || Pre-Deposit before Tribunal under GST Act

Print PDF eBookConcept of pre-deposit As mentioned earlier, the right to appeal is a statutory right which operates within the limitations placed on it by the law. One such limitation flows from the principle that an appellant must first deposit the adjudged dues before his...

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As mentioned earlier, the right to appeal is a statutory right which operates within the limitations placed on it by the law. One such limitation flows from the principle that an appellant must first deposit the adjudged dues before his further appeal can be heard.

However, often an appellant may succeed in his appeal, and hence it would (in retrospect) be unfair to saddle him with this financial burden.

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To balance these factors, tax laws mandate some “pre-deposit” so as to discourage frivolous appeals and also safeguard the bonafide interests of both the taxpayers and the revenue.

The CGST Act, 2017 require an appellant before AA to pre-deposit

full amount of tax, interest, fine, fee and penalty, as is admitted by him, arising from the impugned order and a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order.

In so far as appeals to the Tribunal is concerned, no appeal can be filed before the Tribunal unless the appellant has deposited in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and a sum equal to 20% of the remaining amount of tax in dispute, in addition to the amount deposited before the AA, arising from the said order, in relation to which appeal has been filed.

If the pre-deposit made by the appellant before the AA or Tribunal is required to be refunded consequent to any order of the AA or of the Tribunal, as the case may be, interest at the rate specified in Section 56 shall be payable from the date of payment of the amount (and not from the date of order of AA or of the Tribunal) till the date of refund of such amount.

Pre-Deposit before Tribunal under GST Act

No appeal shall be filed under sub-section (1), unless the appellant has paid–

i. Full amount of tax, interest, fine and penalty arising from the impugned order as is admitted by him and
ii. Sum equal to 20% of the remaining amount of TAX in dispute in addition to the amount deposited u/s 107(6) arising from the order subject to a maximum of Rs.50 Cr in relation to which the appeal has been filed. (Section 112(8) of CGST Act)