Summary: Section 112(8) of the CGST Act, 2017 requires pre-deposit for appeals, including full payment of admitted tax, interest, fine, fee and penalty and 20% of the remaining disputed tax. The 53rd GST Council meeting recommended reducing the Appellate Tribunal pre-deposit from 20% to 10% of disputed tax and reducing the maximum amount from Rs. 50 crore each of CGST and SGST to Rs. 20 crore each. It also recommended a mechanism for adjustment of amounts paid through Form GST DRC-03. The 55th GST Council meeting recommended a 10% pre-deposit for Tribunal appeals involving only penalty without tax demand. The supplied material states that Section 112(8) was amended accordingly and that the Finance Act, 2025 provides for 10% mandatory pre-deposit of penalty in such cases, with its effective date not notified till 10.06.2025. The material also states that, under the erstwhile service tax and central excise regime, pre-deposit payment was permissible from Cenvat credit and cites several decisions supporting this position.
Pre-deposit [Section 112 (8)]
As per section 112(8) of the CGST Act, 2017, no appeal shall be filed unless the appellant has deposited–
(i) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
(ii) a sum equal to twenty percent of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed.
Amount in dispute shall include the following:
(i) amount of tax determined
(ii) amount of fee or fine levied or penalty imposed.
Such provision of pre-deposit shall also apply mutatis mutandis to cross objections.
Section 112 (8) has been amended by Finance Act, 2024 and Finance Act, 2025 based on recommendation of GST Council.
53rd meeting of the GST Council held on 22.06.2024 recommended as follows:
(a) Reduction in the maximum amount of pre-deposit for filing appeals
| Appeal to | Existing | Revised |
|---|---|---|
| First Appellate Authority | The maximum of Rs. 25 Crores CGST and Rs. 25 Crores SGST (Total Rs. 50 crore) | The maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST (Total Rs. 40 crore) |
| Appellate Tribunal | 20% of the disputed tax amount with a maximum amount of Rs. 50 crore CGST and Rs. 50 Crores SGST (Total Rs. 100 crore) | 10% of the disputed tax amount with a maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST. (Total Rs. 40 crore) |
(b) Adjustment of an amount paid through Form GST DRC-03: Amendment in Rule 142 of CGST Rules and issuance of a Circular to prescribe a mechanism for adjustment of an amount paid, in respect of a demand through Form GST DRC-03,against the amount to be paid as pre-deposit for filing of appeal.
55th meeting of the GST Council held on 21.12.2024 recommended to insert a new proviso to Section 112(8) of CGST Act, 2017 providing for payment of pre-deposit at 10% for filing appeals before Appellate Tribunal in cases involving only demand of penalty without involving the demand of tax.
Accordingly amendments have been carried out in section 112(8) by the Finance Act, 2024.
Pre-deposit for appeals
Amendment in the Section 122(8) is so as to reduce the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal from the existing twenty percent to ten percent of the tax in dispute and also reduce the maximum amount payable as pre-deposit from rupees fifty crores to rupees twenty crores in GST.
| Appeal to | Existing | Revised |
|---|---|---|
| First Appellate Authority | The maximum of Rs. 25 Crores CGST and Rs. 25 Crores SGST (Total Rs. 50 crore) | The maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST (Total Rs. 40 crore) |
| Appellate Tribunal | 20% of the disputed tax amount with a maximum amount of Rs. 50 crore CGST and Rs. 50 Crores SGST (Total Rs. 100 crore) | 10% of the disputed tax amount with a maximum of Rs. 20 Crores CGST and Rs. 20 Crores SGST. (Total Rs. 40 crore) |
Amendment by Finance Act, 2025 (effective date not notified till 10.06.2025)
Section 112(8) is amended to provide for 10% mandatory pre-deposit of penalty amount for appeals before Appellate Tribunal in cases involving only demand of penalty without any demand of tax.
Payment of pre-deposit from Cenvat Credit under pre-GST regime
In the erstwhile service tax and central excise regime, it was a settled position that pre-deposit payment is permissible from cenvat credit. Some of the judgments which can be cited, inter alia are as follows:
- Dell International Services India Pvt. Ltd. v CCE (Cestat, Bangalore), (2019) 107 Taxmann. com
- Manak Moti Forgings () Ltd. v CCE, (Final order No. A/341/2010-WZB/C-11/EB, dated 12.10.2020]
- Manaksia Ltd. v CCE, [Final order No. FO/A/75212/2017, dated 08.03.2017]
- Birla Yamaha Ltd. v Collector of Central Excise (Cestat, New Delhi), (1996) taxmann.com 832
- Jhalani Tools (I) v CCE (Cestat), (1997) 95 ELT 105
- Haryana State Electricity Board v Collector of Central Excise (Cestat), (1994) 73 ELT 588
