TaxTMI 
TaxTMI 
All about pre deposit in GST law- take away from GSTAT Cuttack Bench order.
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....ll about pre deposit in GST law- take away from GSTAT Cuttack Bench order.<br>By: - K Balasubramanian<br>Goods and Services Tax - GST<br>Dated:- 17-7-2026<br><br>GSTAT, Cuttack bench has considered the issues pertaining to pre-deposit as well as correct court fees to be paid for preferring an appeal in GSTAT on 08/07/2026. This has lot of take aways for all concerned on both court fees as well as the required amount of pre deposit. Let us straight away go to the facts of the case. One show cause notice was issued under section 73. The OIO was passed imposing CGST, SGST, Interest as well as penalty. It is crucial to calculate pre deposit based on the facts as per the OIO. In the instant case, the CGST as well as SGST of 11,34,474 (total G....
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....ST amount) was confirmed at adjudication stage. The entire amount is in dispute and accordingly, the taxpayer preferred the first appeal under section 107 by making a pre deposit of 10% on the disputed tax which is 1,13,447. The first appeal was admitted and the authority while passing the OIA has reduced the demand as below: S No Component Amount 1 GST 1,02,012 2 Interest 98,680 3 Penalty 10,202 4 Total demand under section 107 2,10,894 Issue one Pre deposit: As the tax payer is before GSTAT against a total demand of 2,10,894, the applicable pre deposit is a maximum of 20% of the disputed GST. To be more precise, when the first appellate authority confirms the OIO, the pre deposit....
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.... is same as applicable for first appeal. In the instant case, the amount in dispute on account of GST before Tribunal is 1,02,012 and pre deposit required is 10,201 only. However as a sum of 1,13,447 is already available as pre deposit in first appeal stage itself, which is more than 20,403 which is the total pre deposit required before GSTAT, the requirement to make any additional pre deposit for second appeal was waived. Issue Two-Court fees: The required court fee is to be calculated based on the amount of dispute in GST/ ITC. The fee payable is Rs.1,000 per lakhs or part thereof subject to a minimum amount of 5,000. and a maximum amount of 25,000. Rule 110 (5) reads as "(5) The fees for filing of appeal or restoration of appe....
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....al shall be one thousand rupees for every one lakh rupees of tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined in the order appealed against, subject to a maximum of twenty five thousand rupees and a minimum of five thousand rupees" Provided that the fees for filing of an appeal in respect of an order not involving any demand of tax, interest, fine, fee or penalty shall be five thousand rupees". In the instant case as only Rs.3,000 was paid as court fees initially as against the required minimum amount of Rs.5,000 the counsel for petitioner agreed to make a further payment of Rs.2,000 for admission of the appeal. Case reference: Manoranjan Dash Ve....
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....rsus Commissioner, Odisha, Commissionerate Of CT GST & Ors. - 2026 (7) TMI 829 - GSTAT CUTTACK. Summary: In case there is no relief granted at first appeal level, there is a need to make the second pre deposit which shall be equal to the first pre deposit. In case there is a partial relief in first appeal, the second pre deposit to be recalculated at 20% of the disputed GST as per the order of the first appellate authority which reduces the requirements on pre deposit before GSTAT as explained below: Description Case 1 Case 2 Case 3 Disputed GST before first appellate authority 1,00,00,000 1,00,00,000 1,00,00,000 Relief at First appeal 20,00,000 40,00,000 75,00,000 Disputed GST at GSTAT 80,0....
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....0,000 60,00,000 25,00,000 Pre Deposit required 16,00,000 12,00,000 5,00,000 Available pre deposit 10,00,000 10,00,000 10,00,000 PRE DEPOSIT for GSTAT 6,00,000 2,00,000 NIL Court fees payable No Disputed GST Court Fees 1 90,000 5,000 2 4,00,000 5,000 3 5,10,267 6,000 4 23,44,980 24,000 5 28,89,278 25,000 6 2,90,85,000 25,000 The Cuttack bench has discussed the issues on required pre deposit as well as applicable court fees at length and the learnings based on the above case law shall be helpful to all concerned. The above examples may help to correctly decide the applicable pre deposit as well as court fees. Despite the functioni....
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....ng of GSTAT and the high courts are suggesting to choose efficacious alternate remedy, there are few cases where writs are admitted in taxpayer favour even now. We may see a sharp reduction in number of writs on GST in the days to come and expect more and more good orders from the benches of GSTAT in the coming months. Reply By Sumit Srivastava as = The GSTAT order insofar as pre-deposit quantum is concerned seems to be patently incorrect because it conveniently avoids throwing any light on the usage of the following words "in addition to the amount paid under sub-section (6) of section 107," in s.112(8) of the Act, 2017. The provision consciously uses the above words to emphasise that the pre-deposit payable u/s 112(8) is distinct ....
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....and separate from that made u/s 107(6). The GSTAT merely agrees to what the Hon'ble Jharkhand High Court opined in the case of Ashirwad Food Industries. There too, it appears the Hon'ble Court's attention was not drawn to the above words existing in section 112(8). Had that been done, perhaps, the complexion of the order would have been different. Be that as it may, it is a settled law that words used in section/rules cannot be considered superflous. Expecting "more and more good orders" of this kind would do more harm than good, for sure. It would be prudent on the part of the CBIC to step in and guide the field formations on the subject matter by taking appropriate steps to challenge the orders referred above. ....
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....Dated: 17-7-2026 Reply By K Balasubramanian as = Thanks Sumit for bringing this to my notice. However, this aspect has been examined before submission of the above article for publication and the same may be analysed once again. The section simply stipulates that "(8) 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, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, subject to a maximum of ( twenty crore rup....
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....ees],] in relation to which the appeal has been filed: This aspect has been looked in to in depth by the Cuttack Bench of the GSTAT based on the principles of doctrine of merger. Once the first appeal order is out which has substantially reduced the tax dues, that becomes the appealable order before GSTAT. In section 112, arising from said order refers to section 107 order only and not the adjudication order. Now, only 20 % of tax determined under 107 is required for 112 which has to be over and above the previously paid amount. This has been nicely explained by way of beautiful examples. Hence, it is submitted that my views are given only after careful thought and in case you still differ in this, you are free to post your views with....
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.... judicial supporting. Dated: 17-7-2026 Reply By Sumit Srivastava as = Respected Sir, My two cents on your response. I do not wish to dwell more on this issue excepting the fact that the words "in addition to the amount paid under sub-section (6) of section 107," in S.112(8) of the Act, 2017" are rendered superflous by such an interpretation as made by the Hon'ble GSTAT (in case you wish to emphasise that the aspect has been looked into in depth by the Bench based on the principles of doctrine of merger, which, unfortunately is nowhere mentioned in the said order). Nonetheless, you may recall the implications that had happened when the pre-deposit provisions were amended by the Finance Act, 2014 and wherein a factor of 7.....
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....5% and 10% was prescribed. The Larger Bench of CESTAT had by its order 2017 (4) TMI 1222 - CESTAT NEW DELHI (LB) concluded that that the statutory 10% pre-deposit for a second appeal to the Tribunal is payable independently and additionally to the 7.5% pre-deposit required for the first appeal. You may recall the furore caused by the TRU letter D.O.F.No.334/15/2014-TRU dated 10/7/2014 regarding the pre-deposit quantum wherein the following was mentioned (reproduced below). The word "another" was the reason for this interpretational debate. 14) Section 129E is being substituted with a new section to prescribe a mandatory fixed pre-deposit of 7.5% of the duty demanded or penalty imposed or both for filing appeal with the Commissioner (A....
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....ppeals) or the Tribunal at the first stage and another 10% of the duty demanded or penalty imposed or both for filing second stage appeal before the Tribunal. The amount of pre-deposit payable would be subject to a ceiling of Rs. 10 crore. You may argue otherwise but the fact of the matter is that the GST provisions, therefore, took ample care to avoid any such interpretational issues and came up with these words "in addition to the amount paid under sub-section (6) of section 107," in S.112(8) of the Act, 2017". The clock cannot be turned back by adopting the interpretation the Hon'ble GSTAT has sought to do. Beautiful examples - agreed, I humbly submit, do not reflect the reality of what the law wants to convey. Hope, eith....
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....er the law is changed or the CBIC clarifies or the GSTAT order is set aside to reflect the correct legal position. Thanks. Sincerely Dated: 17-7-2026 Reply By K Balasubramanian as = Dear Sumit, I sincerely thank you for your prompt response. Issue is not whether your understanding is correct or my understanding is correct. The real issue is which is correct. AS suggested by you, I proceed to Section 107 (6) which reads as " (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 crore rupees, in relation to which the appeal has been filed" Where disputed tax is 1,00,00,000 pre deposit required under 107(6) is 10,00,000 OIA....
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.... is out. as per OIA, disputed tax is only 20,00,000 (Assumed). I proceed to 112 (8): (b) a sum equal to ten per cent of the remaining amount of tax in dispute, in addition to the amount paid under sub-section (6) of section 107, arising from the said order, 13[subject to a maximum of 13a[twenty crore rupees],] in relation to which the appeal has been filed: 10% of the remaining amount of tax in dispute now has become 2,00,000 as per above example. Thus 2,00,000 is required as pre deposit for second appeal. However, the 20% is to be calculated only on 20,00,000 which is not in dispute, I believe. You are of the view that despite existing pre deposit of 10 lakhs, 2 lakhs is to be paid now. Thus total pre deposit is....
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.... 12 lakhs. This is not required at all as the pre deposit for GSTAT is 20% on 20,00,000 which is 4,00,000 only whereas already pre deposit is available for 10 lakhs. This I shall cover in next article. Thanks. Dated: 18-7-2026 Reply By K Balasubramanian as = Dear Sumit, There is substance in your line of arguments. Let me revisit the entire case law of GSTAT, Cuttack decided on 08/07/2026 - 2026 (7) TMI 829 - GSTAT CUTTACK and revert. Thanks for bringing this to my notice. Dated: 18-7-2026 Reply By K Balasubramanian as = I thank Mr.Sumit for sharing his line of thoughts with me. In today articles, learned author Mr.Bimal Jain endorsed my views in his article no further pre deposit is required quoting the same case laws wh....
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....ich I covered. I kindly request you to read the article of learned author Mr.Bimal Jain and offer your comments please. Dated: 21-7-2026 Reply By Sumit Srivastava as = Sir, As mentioned, have read the article by Sh Bimal Jain. With due respect, the learned author too, to whom i always look up to for enriching my knowledge, unfortunately, misses the niceties of the law but follows the public sentiments rampant on the social media. The fact of the matter is, as mentioned by me, in my response to your first comment on my post, such a reading (as propagated by the GSTAT) makes the presence of the words "in addition to the amount paid under sub-section (6) of section 107," in s.112(8) superflous. Also, my reference to the LB d....
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....ecision on an identical pre-deposit provision in the Customs/CE law 2017 (4) TMI 1222 - CESTAT NEW DELHI (LB) . One cannot turn a blind eye towards the settled legal position and pat the back of the Appellate authority for pronouncing a decision in favour of an assessee. Before this issue gets too stormy, it would be prudent for the CBIC to make things clear and transparent. A lot many assessees may land up in the pit and repent if they base their conclusions on such decisions which need to stand the test of law in the higher judicial forums. It is always better to be safe than sorry, goes the old adage. I rest my case here. Thanks. Dated: 21-7-2026 =============<br> Scholarly articles for knowledge sharing by autho....
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....rs, experts, professionals ....