GST pre-deposit for appeal may be paid from the electronic credit ledger where the disputed liability is output tax.

The statutory 10% pre-deposit required to file an appeal under section 107(6)(b) of the Maharashtra GST Act may be discharged from the electronic credit ledger, not only the electronic cash ledger. The scheme distinguishes payment of admitted liability in full from payment of the disputed tax precondition, and permits credit ledger utilisation for payment towards output tax. Because output tax excludes reverse charge tax, the credit ledger can be used for GST liabilities falling within that definition unless the statute expressly bars such use. A departmental circular supporting credit-ledger discharge of output-tax liabilities under GST proceedings was also relied on.

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Issues: Whether the statutory pre-deposit of 10% of the disputed tax required for filing an appeal under section 107(6)(b) of the Maharashtra Goods and Services Tax Act, 2017 can be discharged by utilising the balance available in the electronic credit ledger.

Analysis: Section 107(6) requires payment of the admitted liability in full and a further sum equal to 10% of the remaining tax in dispute as a precondition to filing the appeal. The requirement is one of payment, not merely deposit. Section 49(3) permits amounts in the electronic cash ledger to be used for any payment, while section 49(4) permits the amount in the electronic credit ledger to be used for payment towards output tax. Section 2(82) defines output tax as tax chargeable on taxable supply, excluding reverse charge tax. The Court treated the 10% pre-deposit of disputed tax as a payment of output tax within the statutory scheme, and relied on the departmental circular clarifying that output-tax liabilities arising from proceedings under GST laws may be discharged from the electronic credit ledger, though not liabilities under reverse charge.

Conclusion: The statutory pre-deposit under section 107(6)(b) can be paid by utilising the amount available in the electronic credit ledger, and it is not confined to the electronic cash ledger.

Ratio Decidendi: Where the GST statute requires payment of disputed tax as a precondition to appeal, and the liability is output tax, the amount available in the electronic credit ledger may be used to satisfy that pre-deposit unless the statute expressly prohibits such utilisation.

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