GST First Appeals: Pre-Deposit Requirement & Filing Procedure  

In Part 1, we covered GST appeals basics and timelines. Now comes the critical question: “How much do I need to pay before my appeal is heard?” 

The pre-deposit requirement is one of the most significant aspects of GST appeals. This article explains the calculation, payment methods, and complete filing procedure. 

Pre-Deposit Requirements: How Much Must You Pay? 

Before your appeal is admitted, you must make a mandatory pre-deposit. Appeals without adequate pre-deposit will be rejected. 

Understanding the Pre-Deposit Formula 

You must pay: 

1. 100% of admitted or undisputed tax 

1. PLUS any interest on the admitted amount 

1. PLUS 10% of the disputed tax (maximum cap: Rs. 20 crore) 

Total effective pre-deposit: At least 10% of disputed tax (after paying 100% of admitted tax) 

Step-by-Step Calculation Example 

Scenario: GST order demands Rs. 1 crore total tax 

• You admit Rs. 30 lakhs is correctly demanded 

• You dispute Rs. 70 lakhs 

Your Pre-Deposit Calculation: 

Component	Amount
Admitted tax (100%)	₹30 lakh
Interest on admitted amount (10%)	₹3 lakh
Disputed tax (10% of ₹70 lakh)	₹7 lakh
Total Pre-Deposit	₹40 lakh

 

When No Pre-Deposit is Required 

Pre-deposit is NOT required when your appeal disputes involves: 

• Interest  

• Refund rejections (since no tax demand exists) 

For penalty-only disputes, you pay 10% of the disputed penalty amount. 

Maximum Pre-Deposit Cap: ₹20 Crore 

No matter how large the disputed tax is, the maximum pre-deposit is capped at Rs. 20 crores. 

Example: If disputed tax is Rs. 500 crores, you only need to deposit Rs. 20 crores (the maximum cap), not Rs. 50 crores (10%). 

Key Benefit: Automatic Stay on Recovery 

Once you make the required pre-deposit: 

The balance disputed amount cannot be recovered by the department until your appeal is decided. 

This automatic stay provides crucial cash flow protection during the appeal process. 

Pre-Deposit Payment: Cash vs. Input Tax Credit (ITC) 

What the GST Portal Allows 

The GST portal technically allows pre-deposit payment through: 

• Cash (electronic cash ledger) 

• Input Tax Credit (electronic credit ledger) 

Ground Reality: Conflicting Court Judgments 

Taxpayer-Friendly View 

Madras High Court (November 2024) – Ford India case: 

• Allowed pre-deposit through ITC 

• Held that the statute doesn’t explicitly prohibit it 

Department’s Position 

Bihar High Court (2023) – Flipkart Internet case: 

• Mandated cash pre-deposit only 

• Held that ITC should not be used 

Supreme Court: Stayed the Bihar HC order; SLP is pending final hearing. 

Current Status 

Majority Practice: Most appellate authorities across India now accept ITC for pre-deposits. 

GST Appeal Filing Procedure: Step-by-Step Guide 

Which Form to Use: GST APL-01 

All appeals must be filed using Form GST APL-01 on the GST portal. 

 

Complete Electronic Filing Process 

Step 1: Login to GST Portal 

Access www.gst.gov.in using your credentials. 

Step 2: Navigate to Appeals Section 

Path: Services → User Services → My Applications → Appeal to Appellate Authority (Form GST APL-01) 

Step 3: Fill Form GST APL-01 Details 

Provide essential information: 

• Order details (number, date, issuing authority) 

• Grounds of appeal (detailed reasons why the order is incorrect) 

• Amount of tax in dispute 

• Amount admitted (if any) 

• Pre-deposit details 

Step 4: Upload Supporting Documents 

Document Type	Description
Impugned Order	Order being appealed (if not on portal)
Supporting Evidence	Documents proving your case
Previous Correspondence	Letters with department
Additional Submissions	Other relevant material

 

Step 5: Make Pre-Deposit Payment 

❌ Common Mistake: Paying through Form DRC-03 (for regular tax payments). Appeals with DRC-03 payments have been rejected. 

✅ Correct Method: Use the payment option within the APL-01 form to ensure proper linkage. 

Step 6: Submit with Digital Signature 

Authorized signatories must sign the appeal electronically before submission. 

Understanding the Acknowledgment Process 

A. Provisional Acknowledgment 

• Issued immediately upon submission 

• Contains temporary reference number 

B. Final Acknowledgment 

Issued only after: 

• ✅ Verification of adequate pre-deposit 

• ✅ Confirmation appeal filed within time limit 

• ✅ Basic scrutiny of appeal form 

Contains: Your official appeal number 

Manual Filing: When Is It Permitted? 

Manual (physical) filing is only permitted when: Appellate authority specifically authorizes it in writing 

In all other cases, electronic filing is mandatory. 

Hearing Process and Adjournments 

A. Recent Development: Online Hearings 

For Central GST matters, hearings are generally conducted online unless you specifically request a physical hearing. 

B. Maximum Adjournments 

3 adjournments per party with written reasons required for each request. 

Common Mistakes to Avoid 

❌ Mistake 1: Missing the Deadline 

File at least 10-15 days before the deadline. 

❌ Mistake 2: Wrong Payment Form 

Use APL-01, NOT DRC-03 for pre-deposit. 

❌ Mistake 3: Not paying interest on admitted tax  

Ensure to pay interest on the tax liability you admit to avoid the rejection of appeal  

❌ Mistake 4: Vague Grounds 

Provide detailed, specific reasons with legal citations. 

❌ Mistake 5: Incomplete Documentation 

Compile comprehensive evidence before filing. 

Need Expert Guidance? 

At Unnathi Partners, we provide comprehensive support for GST appeals, including case evaluation, documentation, and representation before GST Appellate Authorities. 

Contact us for a consultation on your GST dispute.