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PRE-DEPOSIT FOR TRIBUNAL APPEALS IN GST

Dr. Sanjiv Agarwal
Pre-deposit for GST appeals now centers on reduced tribunal requirements, penalty-only cases, and adjustment of DRC-03 payments. Pre-deposit for GST tribunal appeals requires payment of the admitted portion of tax, interest, fine, fee and penalty, together with a prescribed percentage of the disputed amount. The framework applies to cross objections as well, and the amount in dispute includes tax determined, fee, fine and penalty. The article also notes amendments reducing the pre-deposit burden, including a ten per cent pre-deposit for tribunal appeals and a ten per cent pre-deposit in penalty-only cases, along with adjustment of Form GST DRC-03 payments. (AI Summary)

Pre-deposit [Section 112 (8)]

As per section 112(8) of CGST Act, 2017, no appeal shall be filed unless the appellant has deposited-

(i) 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

(ii) a sum equal to twenty percent of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.

Amount in dispute shall include the following:

(i) amount of tax determined

(ii) amount of fee or fine levied or penalty imposed.

Such provision of pre-deposit shall also apply mutatis mutandis to cross objections.

Section 112 (8) has been amended by Finance Act, 2024 and Finance Act, 2025 based on recommendation of GST Council.

53rd meeting of the GST Council held on 22.06.2024 recommended as follows:

  1. Reduction in the maximum amount of pre-deposit for filing appeals

Appeal to

Existing

Revised

First Appellate Authority

The maximum of Rs. 25 Crores CGST and Rs. 25 Crores SGST (Total Rs. 50 crore)

The maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST

(Total Rs. 40 crore)

Appellate Tribunal

20% of the disputed tax amount with a maximum amount of Rs. 50 crore CGST and Rs. 50 Crores SGST

(Total Rs. 100 crore)

10% of the disputed tax amount with a maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST.

(Total Rs. 40 crore)

Adjustment of an amount paid through Form GST DRC-03: Amendment in Rule 142 of CGST Rules and issuance of a Circular to prescribe a mechanism for adjustment of an amount paid, in respect of a demand through Form GST DRC-03, against the amount to be paid as pre-deposit for filing of appeal.

55th meeting of the GST Council held on 21.12.2024 recommended to insert a new proviso to Section 112(8) of CGST Act, 2017 providing for payment of pre-deposit at 10% for filing appeals before Appellate Tribunal in cases involving only demand of penalty without involving the demand of tax.

Accordingly amendments have been carried out in section 112(8) by the Finance Act, 2024.

Pre-deposit for appeals

Amendment in the Section 122(8) is so as to reduce the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal from the existing twenty percent to ten percent of the tax in dispute and also reduce the maximum amount payable as pre-deposit from rupees fifty crores to rupees twenty crores in GST.

Appeal to

Existing

Revised

First Appellate Authority

The maximum of Rs. 25 Crores CGST and Rs. 25 Crores SGST (Total Rs. 50 crore)

The maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST (Total Rs. 40 crore)

Appellate Tribunal

20% of the disputed tax amount with a maximum amount of Rs. 50 crore CGST and Rs. 50 Crores SGST (Total Rs. 100 crore)

10% of the disputed tax amount with a maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST. (Total Rs. 40 crore)

Amendment by Finance Act, 2025 (effective date not notified till 10.06.2025)

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 of tax.

Payment of pre-deposit from Cenvat Credit under pre-GST regime

In the erstwhile service tax and central excise regime, it was a settled position that pre-deposit payment is permissible from cenvat credit. Some of the judgments which can be cited, inter alia are as follows:

Goods and Services Tax - GST
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