TaxTMI 
TaxTMI 
GST- Refund of pre deposit- rejection of refund on the ground that electronic liability register shows negative balance
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....ST- Refund of pre deposit- rejection of refund on the ground that electronic liability register shows negative balance<br> Query (Issue) Started By: - PRASAD MVS Dated:- 16-3-2026 Last Reply Date:- 18-3-2026 Goods and Services Tax - GST<br>Got 7 Replies<br>GST<br>A GST demand of Rs 2 Crores was confirmed, and the same was reflected in the Electronic Liability Register (ELR). An appeal was filed ag....
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....ainst the said order by making a redeposit of Rs 20 lakh, resulting in a reduction of demand to 1.80 Crore in ELR. Subsequently, the appeal was allowed, and the entire demand was set aside, and APL 04 was issued. As the entire demand of 2 Crores was reduced in ELR, a negative balance of 20 lakhs was shown in ELR, thereby indicating that a refund of Rs 20 lakhs is due from the department. A refund ....
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....claimed was filed. A notice was issued to reject the refund claim on the ground that, as a negative balance was indicated in ELR, the same can be adjusted against future demands, and hence, the refund of the pre-deposit cannot be sanctioned. The apprehension of the department, if a negative balance remains even after the sanction of a refund, the same might be utilised for future demands, resultin....
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....g in excess payment. As per FAQ (https://tutorial.gst.gov.in/userguide/ledgers/Tax_Liability_Ledger.htm) It was intimated that on the sanction of the refund of the pre-deposit, ELR will get updated accordingly. Any information on the GST form through which ELR will get updated upon the sanction of the refund Reply By KASTURI SETHI: The Reply: Refund cannot be denied. The departments sta....
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....nd is incorrect. "Refund of pre-deposit - Pre-deposit does not partake character of a Tax or duty, being sums deposited by assessee solely for purposes of pursuing Its remedy of appeal - VAT authorities neither entitled in law to retain the pre-deposit amount nor could it have been utilized for adjustment purposes - Section 38 of Delhi Value Added Tax Act, 2004. [para 38]."---------- Delhi High....
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.... Court in the case of Flipkart India Pvt. Ltd. - 2023 (8) TMI 987 - DELHI HIGH COURT Reply By Sadanand Bulbule: The Reply: Pre-deposit is one of the conditions to file an appeal before the FAA/GSTAT. So once the appeal order is in favour of the appellant, deposit must be refunded with mandatory interest under Section 115 of the Act. Sir has rightly pointed out settled legal position. ....
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....Department is always under discomfort as far as refunds are concerned and it is merciless while initiating recovery. Reply By KASTURI SETHI: The Reply: Since GST Acts are based on the pattern of VAT Act, so the judgement of Delhi High Court is squarely applicable to the instant case. Reply By KASTURI SETHI: The Reply: Rightly observed, Sir. Reply By KASTURI SETHI: The Reply: Pre-dep....
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....osit is not a payment of duty but only a pre-deposit for availing right of appeal-- Bombay High Court in the case UOI Vs. Suvidhe Ltd. 1996 (2) TMI 136 - BOMBAY HIGH COURT. Upheld by Supreme Court reported as 1996 (8) TMI 521 - SC Order Reply By PRASAD MVS: The Reply: Thank you all, sirs, for your valuable inputs Reply By Shilpi Jain: The Reply: File an appeal against department refun....
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....d rejection order.<br> Discussion Forum - Knowledge Sharing ....