"How to Handle First Appeal in GST" - Part-3

"Pre-Deposit": 10% of Tax in Dispute (subject to maximum Rs. 50 Crores)

Where appeal is filed against a penalty order for goods seized in transit, minimum 25% of the penalty requirement to be paid before filing appeal.

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Pre-deposit of 10% of disputed tax can be paid either using the amount available in the Electronic Cash Ledger (ECL) or Electronic Credit Ledger (ECrL). Bombay High Court in Oasis Realty vs Union of India (16-Sep-2022)

After this Bombay HC judgment CBIC vide its instruction (CBIC-240137/14/2022-Service Tax Section-CBEC dated 28-Oct-2022) relating to pre-deposit payment method for cases relating to Excise and Service tax, has provided that a credit ledger can be used for filing a GST appeal.

It has further been provided that Form GST DRC-03 cannot be used for payment of pre-deposit amount under GST.

Pre-Deposit can be paid through an Electronic Credit Ledger. Orissa High Court in Kiran Motors vs. Addl. Commissioner of CT & GST (Appeal) (10-Aug-2023)

Recently, Patna High Court allowed 10% payment from ECrL because of pending of this issue before Supreme Court. Friends Mobile vs State of Bihar (06-Dec-2023)

Patna High Court earlier in case of Flipkart Internet Pvt. Ltd. vs State of Bihar (19-Sep-2023) held that Pre-deposit (10%) is not a part of tax liability; hence, pre-deposit can only be done by utilising ECL not ECrL.

However, this is now pending before the Supreme Court in Flipkart Internet