The GST portal has issued a final advisory regarding payment of pre-deposit amounts through Form DRC-03 while filing appeals. This update clarifies how taxpayers should make payments when filing appeals before the Appellate Authority. Below is a simplified explanation of the advisory.

Background

Under GST, when a taxpayer files an appeal against a demand order, the law requires a mandatory pre-deposit of a certain percentage of the disputed tax.

As per Section 107(6) of the CGST Act, the taxpayer must deposit:

  • 100% of the admitted tax liability, and

  • 10% of the disputed tax amount (subject to the prescribed limit).

Only after this pre-deposit is made can the appeal be filed before the Appellate Authority.

Previously, taxpayers often made this payment using Form DRC-03 on the GST portal.

GST Advisory on Pre-Deposit Payment via DRC-03 Explained

What the Advisory Clarifies

The GST portal has clarified the correct process for making pre-deposit payments for appeals.

Key points from the advisory include:

1. Use the Appeal Filing Process on the Portal

Taxpayers filing appeals should make the required pre-deposit directly through the appeal filing functionality on the GST portal, rather than making a separate voluntary payment.

2. Avoid Using DRC-03 for Appeal Pre-Deposit

Form DRC-03 is primarily meant for voluntary payments (for example, payments made during audit, investigation, or self-ascertainment).

Using DRC-03 for appeal pre-deposit may cause system reconciliation issues when filing the appeal.

3. Linking Payment with Appeal

When the payment is made through the appeal module, it automatically gets linked with the appeal application, making the process smoother for both taxpayers and authorities.

4. Earlier Payments through DRC-03

In cases where taxpayers have already paid the pre-deposit through DRC-03, the advisory indicates that the GST portal will provide mechanisms to ensure that such payments can be properly linked with the appeal.

Why This Change Matters

This clarification aims to improve the system-based linkage between payments and appeals. The key benefits include:

  • Reducing technical errors during appeal filing

  • Ensuring automatic verification of pre-deposit

  • Minimizing manual intervention by tax authorities

  • Making the appeal process more streamlined and transparent

Practical Takeaway for Taxpayers

Taxpayers intending to file an appeal should ensure that:

  • The mandatory pre-deposit is paid through the appeal filing module, and

  • DRC-03 is not used for making pre-deposit payments related to appeals.

Following the prescribed process will help avoid delays or technical issues while filing appeals.