Table of Contents
Orissa Honorable High court: Pre deposit for filing appeal under GST to be paid Via cash ledger only & adjustment not allowed from credit ledger
Fact
- In case of Jyoti Construction v. Deputy Commissioner of CT & GST, Jajpur (Orissa) petitioner was a partnership firm doing the business of execution of works contract of mechanical & civil, electrical.
- In the above said case Additional Commissioner rejected the appeal filed by the petitioner holding that the appeals filed were defective. Additional Commissioner was of the view that the petitioner had made payment of the pre-deposit being 10 percentage of disputed amount under the SGST, CGST, IGST by debiting its electronic credit ledger.
- Firm did not pay pre- deposit from electronic cash ledger & this was in contravention of provision of under section 49(3) of Goods and Services Tax Act, 2017. The petitioner filed writ petition against this order.
Held :
- Orissa Honorable High Court found that output Tax as defined u/s 2(82) of Goods and Services Tax Act, 2017 could not be equated to pre-deposit required to be made as per the stated in terms of u/s 107(6) of GST act.
- The petitioner was needed to make payment equivalent to 10 percentage of the disputed sum of GST tax arising from order against which the appeal was filed.
- Input tax credit ledger cannot be debited for making payment of pre-deposit at the time of filing of GST Appeal. So the Orissa Honorable High court found no merits & So writ petition was liable to be dismissed.
Furthermore, Section 49(4) of the CGST Act, 2017 states that "the amount available in electronic credit ledger may be used for making the payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed for making the payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such way and subject to such conditions and within such time as may be prescribed."
It means that the funds in the electronic credit ledger can only be used to pay for output taxes and not for interest, penalties, or fines.
Pre-fixed deposit Condition for filling GST Appeals:
Aggrieved taxpayer who willing to contend against the verdict of ‘Adjudicating Authority of GST’ can be file an GST Appeal before the 1st Appellate authority. However, the said appeal shall be filed within 3 months of receiving the GST Order.
For the GST Appeal to be accepted, they must pay:
- Such part of GST demanded as per verdict that Aggrieved taxpayer admits being liable for; &
- 10 percentage of remaining part of GST demanded in the verdict as INR 25 crores or a pre-deposit amount, whichever is lower.
In the same way aggrieved taxpayer is not happy with discsion passed by the first appellate authority, Aggrieved taxpayer may approach tribunal as a next option, in the upcoming 3 months. For the appeal to be accepted, Aggrieved taxpayer must pay:
- Such part of GST demanded in the verdict that taxpayer admits being liable for; &
- 20 percentage of the remaining part of tax demanded in the verdict as a pre-deposit sum or INR 50 Cr., whichever is lower.
Above said 20% will be in addition to that what he was deposited before the 1st appellate authority.
It is required to be noted That Pre-fixed deposit sum must be returned in case the taxpayer is proven right via GST appeal proceedings. Similarly, as per the Integrated Goods And Services Tax Act, 2017, for all the transaction under the inter-state transactions, Maximum cap for Pre-deposit sum is INR 50 CR & INR 100 Cr before 1st appellate authority & appellate tribunal.
