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Circular No. 224/18/2024 - GST
CBIC-20001/4/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
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New Delhi, Dated the 11
th
July, 2024
To,
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All)
Madam/Sir,
Subject: Guidelines for recovery of outstanding dues, in cases wherein first
appeal has been disposed of, till Appellate Tribunal comes into operation.
Doubts have been raised by the trade and the field formations in respect of recovery
of outstanding dues, in cases where the first appellate authority has confirmed the demand
created by the adjudicating authority, fully or partially, and where appeal against such order
of appellate authority could not be filed under section 112 of the Central Goods and
Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) due to non- constitution
of Appellate Tribunal (hereinafter referred to as ‘Tribunal’), as yet. Doubts have also been
raised as to whether the amount that was originally intended to be paid towards the demand
created but has inadvertently been paid and intimated by the taxpayer through FORM GST
DRC-03 either under the ‘voluntary’ category or under the ‘others’ category, can be
adjusted against the pre-deposit that is required to be paid by the taxpayer for filing appeal
before the appellate authority under section 107, and before the appellate tribunal under
section 112 of the CGST Act.
2. The matter has been examined. In order to clarify the issue and to ensure uniformity
in the implementation of the provisions of the law across field formations, the Board, in
exercise of its powers conferred by section 168 (1) of the CGST Act, hereby issues the
following clarifications and guidelines.
3. In cases, where the first appellate authority has confirmed the demand issued by the
adjudicating authority, partially or fully, the taxpayers cannot file appeal against the said
appellate order at present due to non-operation of GST Appellate Tribunal as yet. As per
Section 112 of the CGST Act, every person has statutory remedy of appeal against the order
passed by the first appellate authority or by a revisional authority, before the Tribunal. As
per section 78 of CGST Act, the recovery proceedings are to be initiated, if the amount
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payable as per the order issued under the said act is not paid by the concerned person within
the said period of three months from the date of service of the said order. It may further be
noted that if any person files an appeal in accordance with the requirement of sub-section (8)
of section 112 of the CGST Act (i.e., on payment of prescribed pre-deposit), the recovery
proceedings for the balance amount is deemed to be stayed till disposal of the appeal as per
sub-section (9) of section 112 of the CGST Act. However, as the taxpayers are not able to
file appeal under section 112 in Appellate Tribunal against the orders of appellate authority
and therefore, are not able to make the pre-deposit under sub-section (8) of section 112 of
CGST Act, in some cases, the tax officers are taking a view that there is no stay against
recovery as per sub-section (9) of section 112 of CGST Act. In some cases, taxpayers have
either paid or are willing to pay the requisite amount of pre-deposit as per sub-section (8) of
section 112 of CGST Act either by crediting in their electronic liability register against the
demand so created, or by depositing the said amount through FORM DRC-03. However, tax
officers are still resorting to recovery proceedings after completion of period stipulated
under section 78 of CGST Act.
4. In order to facilitate the taxpayers to make the payment of the amount of pre-deposit
as per sub-section (8) of section 112 of CGST Act, and to avail the benefit of stay from
recovery of the remaining amount of confirmed demand as per sub-section (9) of section
112 of CGST Act, it is hereby clarified that in cases where the taxpayer decides to file an
appeal against the order of the appellate authority and wants to make the payment of the
amount of pre-deposit as per sub-section (8) of section 112 of CGST Act, he can make the
payment of an amount equal to the amount of pre-deposit by navigating to Services >>
Ledgers>> Payment towards demand, from his dashboard. The taxpayer would be
navigated to Electronic Liability Register (ELL) Part-II in which he can select the order, out
of the outstanding demand orders, against which payment is intended to be made. The
amount so paid would be mapped against the selected order and demand amount would be
reduced in the balance liability in the aforesaid register. The said amount deposited by the
taxpayer will be adjusted against the amount of pre-deposit required to be deposited at the
time of filing appeal before the Appellate Tribunal.
5. The taxpayer also needs to file an undertaking/ declaration with the jurisdictional
proper officer that he will file appeal against the said order of the appellate authority before
the Appellate Tribunal, as and when it comes into operation, within the timelines mentioned
in section 112 of the CGST Act read with Central Goods and Services Tax (Ninth Removal
of Difficulties) Order, 2019 dated 03.12.2019. On providing the said undertaking and on
payment of an amount equal to the amount of pre-deposit as per the procedure mentioned in
para 4 above, the recovery of the remaining amount of confirmed demand as per the order of
the appellate authority will stand stayed as per provisions of sub-section (9) of section 112
of CGST Act.
6. In case, the taxpayer does not make the payment of the amount equal to amount of
pre-deposit or does not provide the undertaking/ declaration to the proper officer, then it will
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be presumed that taxpayer is not willing to file appeal against the order of the appellate
authority and in such cases, recovery proceedings can be initiated as per the provisions of
law. Similarly, when the Tribunal comes into operation, if the taxpayer does not file appeal
within the timelines specified in Section 112 of the CGST Act read with Central Goods and
Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03.12.2019, the remaining
amount of the demand will be recovered as per the provisions of law.
7.1 It has also been noticed that some taxpayers have already paid amounts that were
intended to have been paid towards a demand, through FORM GST DRC-03. Attention is
invited to notification No. 12/2024- CT dated 10.07.2024, vide which sub-rule (2B) of Rule
142 and FORM GST DRC-03A has been inserted in Central Goods and Services Rules,
2017 (hereinafter referred to as ‘CGST Rules), providing for a mechanism for cases where
the person liable to pay tax, interest and penalty under section 52 or section 73 or section 74
or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or
section 129 or section 130 of CGST Act has made payment of such tax, interest and penalty,
inadvertently through FORM GST DRC-03 under sub-rule (2) of Rule 142. In such cases,
the said person can file an application in FORM GST DRC-03A, electronically on the
common portal, and the amount so paid and intimated through the FORM GST DRC-03
shall be adjusted as if the said payment was made towards the said demand on the date of
such intimation through FORM GST DRC-03.
7.2 Accordingly, in cases where the concerned taxpayer has paid an amount that was
intended to have been paid towards a particular demand through FORM GST DRC-03, has
submitted an application in FORM GST DRC-03A on the common portal, the amount so
paid and intimated through the FORM GST DRC-03 will be considered as if the payment
was made towards the said demand on the date of such intimation through FORM GST
DRC-03. The amount so paid shall also be liable to be adjusted towards the amount required
to be paid as pre-deposit under Section 107 and Section 112 of the CGST Act, if and when
the taxpayer files an appeal against the said demand, before the appellate authority or the
appellate tribunal, as mentioned in para 4 above, and the remaining amount of confirmed
demand as per the order of the adjudicating authority or the appellate authority, as the case
may be, will stand stayed as per provisions of sub-section (6) of section 107 and sub-section
(9) of section 112 of CGST Act. However, if the taxpayer does not file appeal within the
timelines prescribed in Section 107 and Section 112 of the CGST Act, as the case may be,
read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019
dated 03.12.2019, the remaining amount of the demand will be recovered as per the
provisions of law.
7.3 In this regard, it is to be mentioned that the application in FORM GST DRC-03A for
adjustment of demand liability against the payment through FORM GST DRC-03 cannot be
made in cases where against the payment made through the said FORM GST DRC-03,
proceedings have already been concluded by issuance of an order in FORM GST DRC-05 as
per the Rule 142(3) of CGST Rules, 2017.
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8.1 Currently, the above-mentioned functionality for filing of an application in FORM
GST DRC-03A, is not available on the common portal. Therefore, till the time such
functionality is made available on the common portal, in respect of cases where an amount of
pre-deposit has been inadvertently paid through FORM GST DRC-03 instead of making the
said payment through Electronic Liability Ledger-II against the demand created in the said
ledger, the concerned taxpayer may intimate the proper officer about the same, and on such
intimation, the proper officer may not insist on recovery for the remaining amount payable by
the concerned taxpayer, till the time the said functionality of FORM GST DRC-03A is made
available on the portal.
8.2 Once the functionality of FORM GST DRC-03A is made available on the portal, the
concerned taxpayer may file an application in FORM GST DRC-03A, on the common portal,
at the earliest, as mentioned in para 7.1 above and on doing so, the amount paid vide FORM
GST DRC-03 may be adjusted against the pre-deposit under section 107 or section 112 of the
CGST Act, as the case may be, as detailed in para 7.2 above. However, in case the taxpayer
fails to file an application in FORM GST DRC-03A on the common portal, the proper officer
may proceed to recover the amount payable as per provisions of section 78 and section 79 of
CGST Act.
9. It is requested that suitable trade notices may be issued to publicize the contents of
this Circular.
10. Difficulty, if any, in implementation of the above instructions may please be brought
to the notice of the Board. Hindi version would follow.
Sanjay Mangal
Principal Commissioner (GST)
