Pre-deposit Required Only for First Tax Order Liability
Under GST appeals, taxpayers often worry if multiple tax orders demand multiple pre-deposits. A recent High Court decision clarifies: Pre-deposit is needed only for the tax liability in the first order, even if a second order includes the same amount.
What Does Pre-deposit Mean?
- A pre-deposit is a mandatory payment for filing an appeal against a tax order.
- Under Section 107(6) of the CGST Act, 2017:
- 10% of the disputed tax amount must be paid to admit the appeal.
- This ensures only genuine disputes reach higher authorities.
Key High Court Ruling
Case: S.B. Traders vs. State of U.P. & Ors
Citation: [2024 (91) G.S.T.L. 314 (All.)]
Held:
- If the second order repeats the same tax demand, a fresh pre-deposit is not required.
- Pre-deposit for the first order covers the same liability.
How This Helps Taxpayers
- Avoids double financial burden for same dispute.
- Clarifies confusion during departmental appeals or rectifications.
- Ensures fair compliance without excess cash blockage.
Expert Tip
Always check if multiple orders are derivative (one is based on another). If so, use this ruling to save on extra pre-deposits. Attach this case law in your appeal memo for stronger representation.
Quick Table: Pre-deposit Clarified
| Point | What It Means |
|---|---|
| Law | Section 107(6) CGST Act |
| Amount | 10% of disputed tax |
| Multiple Orders | No double pre-deposit if tax is same |
| Case Used | S.B. Traders (2024) |
| Practical Tip | File appeal with copy of first pre-deposit |
📌 Frequently Asked Questions (FAQs)
Q1. What if the second order includes a new tax amount?
A fresh pre-deposit is needed for the additional amount only.
Q2. Where to pay pre-deposit?
Use the GST portal: E-payment → Demand → Select order.
Q3. Can I get refund of pre-deposit if I win?
Yes. If appeal succeeds, refund claim can be filed under Section 54 CGST Act.
Summary
Taxpayers need to pay pre-deposit only for the first tax order if a second order repeats the same liability. This prevents double payment. Refer to S.B. Traders vs. State of U.P. for legal backing. Learn more about GST appeals with Efiletax.