Appeal to Commissioner Appeals

[Kaustubh Karandikar]

Demand of GST with interest and penalty confirmed by issuing Order – In – Original. The taxpayer will be filing an appeal against the same with Commissioner – Appeals. Can he pay only the tax demand without paying interest and penalty ‘Strictly Under Protest’ while filing the appeal to avoid the accumulation of interest figure if the decision goes against him?

[KASTURI SETHI]

Filing an appeal is itself a kind of protest.

[Sadanand Bulbule]

Dear querist.

A tax payer is normally hurt/aggrieved by the orders which are not inconsanance with the prevailing laws and the binding judicial rulings Therefore an appeal is the civilised way of protest.

Very meaningful answer Sirji.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, Thanks a lot for your support and elaboration of the reply. You have completed my reply by way of elaboration. A finishing touch indeed.

[Kaustubh Karandikar]

Thanks all the experts for your kind advice. In my view there is no specific provision unlike erstwhile Excise provisions, to pay the tax 'UNDER PROTEST'. Therefore, even if you pay, since there is no specific provision, the interest might be charged if the decision goes against you till that date, even though you pay the tax under protest.

[KASTURI SETHI]

'Under Protest' is an ingredient of principles of natural justice. Rather, Human Right.

[Shilpi Jain]

Agree with Kasturi sir.

Also the assessee can pay the tax amount demanded to avoid increase in interest liability.

However, in the past it has been seen that the government has introduced amnesty schemes due to which these kind of persons (who have paid the amount demanded just to avoid increase in interest) were at loss. They were not allowed reduction in demand.

All these kind of amnesty schemes are very discouraging for the honest and risk averse tax payers.

[KASTURI SETHI]

Another Amnesty Scheme is in the offing. Wait for the year 2024 !

[Padmanathan KV]

While filing the Appeal, the form takes to pre-deposit form. In that form "10%" maybe changed to higher percentage say 100%. This would achieve your goal I believe.

Legally also, Section 107 (6) reads as:

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

(a) 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

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.

So, 10% seems to be only minimum amount for filing appeal.

This view I am putting forth as payment through DRC-03 can have following consequence.

1. Depart may contest that any amount paid in DRC-03 is voluntarily paid and hence not protested. Though it may not stand the test of law, it may can prolong litigation.
2. You may have to file refund application against DRC-03 explaining all the issues etc.

Alternatively, if higher amount is paid as pre-deposit I believe it doesn't lose character of pre-deposit and hence getting refund back on success in appeal will be easier.

AI Summary

Pre-deposit requirement: increase pre-deposit to prevent interest accrual while appealing a GST demand and consider refund route if successful. Filing an appeal operates as protest but GST lacks a specific provision for payments made 'under protest,' so paying only the tax may not stop interest and penalty accrual. The appeal regime requires payment of admitted amounts and a minimum pre-deposit; taxpayers may increase the pre-deposit above the minimum to avoid further interest and to ease refund recovery if the appeal succeeds, though this can invite departmental arguments of voluntary payment and may require separate refund proceedings.