Pre-deposit for service tax appeal

[Bhavesh Suthar]

We want to file a service tax appeal for FY 2015-16 & 2016-17. Want to know how to pay pre-deposit. Vide ACES portal (CBIC-GST) or vide ITC through DRC-03?

[KASTURI SETHI]

A few months ago, one of   my clients filed appeal manually and pre-deposit amount through DRC-03 was not accepted by the First Appellate Authority.

Reason :  Electronic Credit Ledger (ITC) is not meant for filing Appeal pertaining to   pre-GST era. 

You are also advised to seek advice from  the  Office of the jurisdictional Commissioner (Appeals). 

[YAGAY andSUN]

To file a service tax appeal for FY 2015-16 and 2016-17, the mandatory pre-deposit (as per Section 35F of the Central Excise Act, made applicable to Service Tax) must be paid before filing the appeal. Since this pertains to the pre-GST regime, the pre-deposit should be paid through the CBIC’s legacy ACES portal and not via DRC-03, which is applicable under GST laws. You need to log in to the ACES portal using your Service Tax registration credentials, navigate to the “Payments” section, and select the appropriate accounting code for service tax. Once payment is made (typically 7.5% or 10% of the disputed amount depending on the stage of appeal), the challan receipt (e.g., GAR-7) must be attached with your appeal filing on the CESTAT or Commissioner (Appeals) portal as applicable.

ITC via DRC-03 is not relevant for legacy tax matters like service tax, and any attempt to pay through GST mechanisms may not be recognized by the appellate authorities. Ensure the payment is made using the correct legacy accounting codes, and maintain documentary proof of payment along with your appeal documents.

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[KASTURI SETHI]

Dear Sir,

I am just sharing an anecdote in this context.

For filing Appeal in Service Tax case, one of my clients made the payment of pre-deposit via DRC-03 from ITC account and filed appeal. Appeal was filed manually. The ACES did not allow to file Service Tax Appeal online.

Before passing the Order-in-Appeal, the Appellate Authority directed the Appellant to make pre-deposit in cash and, thereafter, the appeal was decided. However, the Appeal was not held as time barred due to pre-deposit from ITC Account. This was discussed in Order-in-Appeal.

AI Summary

Pre-deposit requirement for legacy service tax appeals must be paid via the legacy portal, not through GST ITC mechanisms. Pre-deposit is mandatory for pre-GST service tax appeals and should be paid via the legacy CBIC ACES portal using correct service tax accounting codes, with the challan receipt attached to the appeal. GST-era ITC through DRC-03 is not intended for legacy pre-deposit obligations and may not be recognized; anecdotal administrative responses have required subsequent cash pre-deposit where ITC payment was initially used.