- Is pre-deposit mandatory for filing the appeal under the GST Act?
Yes, as per section 107(6) pre-deposit is mandatory for filing an appeal under GST.
- How much pre-deposit required for filing the appeal?
As per the GST Act, no appeal shall be entertained unless both the conditions are satisfied simultaneously:-
1. the person had paid the full amount of taxes, interest, fine, penalty and fees for the order which he had accepted.
2. the person had paid the 10% of the remaining amount of taxes in disputes.
Let’s see an Example:
Huge Ltd. had got an order, and in that order, the department had raised the two demands for (i) ₹ 30 lacs and (ii) ₹ 25 lacs.
The Huge ltd. had accepted the 30 lacs demand and didn’t filed an appeal against it but for ₹ 25 lacs company had filed an appeal?
The consequence will be:
The Huge ltd. had to deposit ₹ 30 lacs and ₹ 2.5 lacs (₹25 lacs * 10%) = ₹ 32.5 lacs as a pre-deposit before filing an appeal.
- What is the maximum limit for pre-deposit in the GST Act?
The maximum limit for pre-deposit as per GST act is ₹ 25 crores.
Huge Ltd. had got an order, and in that order, the department had raised the demand for ₹ 300 crores?
As per 10% rule; the pre-deposit shall be ₹ 30 crores (₹ 300 crores * 10%), but there is a maximum limit for pre-deposit ₹ 25 cores so that the pre-deposit will be ₹ 25 crores.
- Can Input tax credit be used for the pre-deposit purpose?
Yes, ITC can be used for the pre-deposit purpose for filing an appeal under GST.
- How to get a refund for the pre-deposit under GST Act?
If an appeal is decided in favour of the assessee, the pre-deposit will be refunded by the department within 60 days starting from the date of appeal is decided in favour of assessee. Refund d within 60 days then the department is liable to pay interest on refund amount @ 6% p.a. (maximum rate).