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Understanding Pre-Deposit Requirements for GST Appeals under Amnesty Scheme

The Ministry of Finance has introduced a special amnesty initiative designed for individuals or entities with Goods and Services Tax (GST) Appeals. This initiative is primarily intended for those taxpayers who faced challenges in filing their appeals due to the expiration of the deadline as stipulated in Section 107 of the Central GST Act, 2017, and for those whose appeals were rejected primarily due to the delay in submitting appeals related to orders issued under Section 73 and 74 of the GST Act.

It’s important to note that this scheme exclusively applies to disputes associated with taxation matters. Read Notification: Central Govt notifies Amnesty Scheme for Condoning Delay in Filing Appeals; File your Appeals before 31st January 2024 Conditions for Filing Appeal under GST Amnesty Scheme 100% Pay of tax, interest, fee and penalty admitted. 12.5% of tax disputed subjected to 25 Crores, out of which 20% shall be paid through the Electronic Cash Ledger.

Under regular circumstances, the standard pre-deposit requirement is 10% of the disputed tax amount. Nevertheless, when opting for the amnesty scheme, you must deposit a slightly higher pre-deposit, specifically 12.5% of the disputed tax amount. This adjusted pre-deposit percentage is a unique condition imposed for those who wish to take advantage of the benefits provided by the amnesty scheme. In the condition 1, If your overall demand, encompassing interest, fees, and penalties, amounts to Rs. 10,00,000 (10 Lakhs), and you acknowledge a liability of Rs. 3,00,000 (3 Lakhs) from this total, you are required to make a payment of the entire Rs. 3 Lakhs prior to initiating the appeal process or during the appeal process. Payment of the admitted amount can be made in two ways. 1.

Prior to initiating appeal, it can be paid through the electronic liability register under the head amount intended to be paid as shown against the demand ID created in the electronic liability register available in the GST portal of the taxpayer. 2. During the appeal process, it can be paid under the admitted amount column. In the Condition 2, If you have a total tax dispute of Rs. 6,00,000 (6 lakhs) out of a total of 10,00,000 (10 lakhs), you will need to make a payment of 12.5% of the disputed amount, which comes to Rs. 75,000. Additionally, there is a mandatory requirement that 20% of the Rs. 75,000 pre-deposit must be paid from your Electronic Cash Ledger, which amounts to Rs. 15,000.

You can settle the remaining balance from your credit ledger if you have sufficient funds available. With regards to the taxpayer who has already paid 10% for appeal and whose appeal was rejected on the sole ground on the time of limitation, has to pay only 2.5% of the disputed tax for availing this scheme. Also, it shall be payable in cash. Read More: New GST Appeal Amnesty Scheme Notification: What it Means for Taxpayers In order to be eligible to submit an appeal within the framework of the amnesty scheme as a taxpayer, you must meet and satisfy both of the above-mentioned conditions. This means that meeting each of these conditions is a prerequisite for being able to proceed with your appeal under this scheme. Refund of the Excess Amount Paid In accordance with the notification, taxable individuals will not be eligible for a refund on any excess amount they may have paid. Instead, the complete refund will only be processed and disbursed after the resolution or finalisation of the appeal.

This means that any overpaid funds will not be reimbursed immediately but will be included as part of the refund once the appeal process is concluded. Critical Analysis From a thorough analysis perspective, taxpayers who have already made a 10% pre-deposit and had their appeals rejected primarily due to delays in filing, are presented with a unique opportunity through this amnesty scheme to seek justice. This opportunity becomes especially valuable when considering the current non-operational state of GST Appellate Tribunals. It’s important to emphasise that any refunds will not be initiated until the appeal is formally resolved or concluded.

This means that taxpayers will need to wait until the appeal process reaches its finality before any potential refunds are processed. This condition underscores the significance of carefully considering the financial implications and timing when opting for this amnesty scheme. Another criticism raised from the experts is that the scheme is only applicable to the orders issued till 31st march 2023. According to them, the scheme could have included orders issued at least till 30th June 2023.

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