Key Points on Pre-Deposit for GST Appeals

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"PRE-DEPOSIT" Part-6: Key points on Filling Appeal before GST Appellate Tribunal #GSTAT The maximum amount of Pre-Deposit is not Rs. 40 Crores. Also, it has been clarified that 10+10 = 20% and the Department's view that fresh 20% deposit was required was rejected.

Few Case Laws on Pre-Deposits: Oasis Realty vs Union of India - Bombay High Court (16-Sep-2022) The court allowed the use of the ECrL for pre-deposit, which led to the CBIC issuing instructions related to the pre-deposit payment method for Excise & ST cases, including GST appeals

CBIC Instructions (28-Oct-2022) Following the Bombay High Court judgment, the CBIC issued instructions clarifying that the credit ledger can be used to file a GST appeal. However, it specified that Form GST DRC-03 cannot be used to pay the pre-deposit amount under GST.

Sumat Gupta & Co. vs Union of India - Punjab & Haryana High Court (23-Apr-2024) Merely because the pre-deposit had not been submitted at the time of filing the Appeal, it cannot be said that a pre-deposit cannot be made after the filing of the Appeal;

once the pre-deposit had been made and the same was already accepted, the assessee's appeal could not have been rejected.

Annai Food Products Pvt. Ltd. vs Additional Commissioner (Appeal-II), Chennai - Madras High Court (20-Feb-2024) Where the assessee filed a writ petition seeking a mandamus to grant exemption from payment of 10 per cent pre-deposit, which is a condition to entertain an appeal,

the respondent authority could not be directed to deviate from statutory prescription.

Kiran Motors vs. Addl. Commissioner of CT & GST (Appeal) - Orissa High Court (10-Aug-2023) Confirmed that the pre-deposit can be paid through the ECrL.

Friends Mobile vs State of Bihar - Patna High Court (06-Dec-2023) Allowed the use of the ECrL for the pre-deposit due to the pending issue before the Supreme Court.

Flipkart Internet Pvt. Ltd. vs State of Bihar - Patna High Court (19-Sep-2023) It was held that the pre-deposit (10%) is not part of tax liability and can only be made using the ECL, not the ECrL. This order was stayed by the Supreme Court,

allowing temporary relief for similar cases, including Friends Mobile.

Jyoti Construction vs Deputy Commissioner of CT & GST - Orissa High Court (07-Oct-2021) Disallowed the use of the ECrL for pre-deposit, stating that the pre-deposit is not an ‘Output tax’ and thus cannot be paid through the ECrL.

S Tejas Arecanut Traders vs Joint Commissioner of Commercial Taxes - Karnataka High Court (20-Dec-2023) It has been clarified that the pre-deposit of the disputed amount does not include interest, fine, or penalty but only the tax amount. Thanks Raja Abhishek NIRC Candidate 2024