Background:
The 53rd GST Council recommended reducing the amount of pre-deposit for filing of appeals under GST to ease cash flow and working capital blockage for the taxpayers. The maximum amount for filing appeal with the appellate authority has been reduced from Rs. 25 crores CGST and Rs. 25 crores SGST to Rs. 20 crores CGST and Rs. 20 crores SGST. Further, the amount of pre-deposit for filing appeal with the Appellate Tribunal has been reduced from 20% with a maximum amount of Rs. 50 crores CGST and Rs. 50 crores SGST to 10 % with a maximum of Rs. 20 crores CGST and Rs. 20 crores SGST.
Now:
The CBIC vide Notification No. 20/2024 – Central Tax dated October 8, 2024 has inserted the following in Rule 108(1) of the CGST Act and Rule 110(1) of the CGST Act:
“In the said rules, in FORM GST APL-01, with effect from the 1st day of November, 2024.–
(a) in entry number 15,–
(i) in clause (a), in the Table, in the first column relating to “Particulars”, in item (b) relating to “pre-deposit”, for the brackets, letters, words and figures “(b) Pre- deposit (10% of disputed tax /cess but not exceeding Rs. 25 crore each in respect of CGST, SGST or cess or not exceeding Rs.50 crore in respect of IGST and Rs. 25 crore in respect of cess)”, the brackets, letters, words, and figures “(b) Pre- deposit (10% of disputed tax /cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess, and not exceeding Rs. 40 crore in respect of IGST)” shall be substituted;
(ii) in clause (b), in the opening portion, for the brackets, words, figures and letters “ (pre-deposit 10% of disputed tax and cess but not exceeding Rs. 25 crore each in respect of CGST, SGST or cess or not exceeding Rs.50 crore in respect of IGST and Rs. 25 crore in respect of cess)”, the brackets, words, figures and letters “(pre- deposit 10% of disputed tax and cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess, and not exceeding Rs. 40 crore in respect of IGST)” shall be substituted.
In the said rules, in FORM GST APL-05, with effect from the 1st day of November, 2024,
(a) in entry number 14,–
(i) in clause (a), in the Table, in the first column relating to “Particulars”, in item (b) relating to “pre-deposit”, for the brackets, letter, words and figures “(b) Pre- deposit (20% of disputed tax /cess but not exceeding Rs. 50 crore each in respect of CGST, SGST or cess or not exceeding Rs.100 crore in respect of IGST and Rs. 50 crore in respect of cess)”, the brackets, letters, words and figures “(b) Pre- deposit (10% of disputed tax /cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess, and not exceeding Rs. 40 crore in respect of IGST)” shall be substituted;
(ii) in clause (b), for the opening portion, the following shall be substituted, namely: – “(b) Details of payment of admitted amount and pre-deposit of 10% of the disputed tax and cess but not exceeding Rs. 20 crore each in respect of CGST, SGST, cess and not exceeding Rs. 40 crore in respect of IGST.”
Our Comments:
The recent reduction in the quantum of pre-deposit for filing appeals under GST is a welcome step to alleviate working capital pressures for taxpayers. By lowering the pre-deposit requirement to 10% of the disputed tax/cess (with a cap of Rs. 20 crore each for CGST and SGST, and Rs. 40 crore for IGST), the government aims to ease the financial burden on businesses and improve liquidity. This change will especially benefit large taxpayers involved in high-value disputes by reducing the upfront financial commitment necessary for pursuing appeals. The effective date of November 1, 2024, gives businesses adequate time to prepare and adjust to this new requirement, reflecting the government’s intent to facilitate a smoother dispute resolution process.
The Notification can be accessed at: https://a2z-bucket.s3.ap-south-1.amazonaws.com/CBIC_notified_the_Central_Goods_and_Services_Tax_%28Second_Amendment%29_Rules%2C_2024..pdf