CBIC Clarifies GST Pre-Deposit Refund Procedure in Appeals Under Sections 107 and 112, Addresses Six Key Questions:

The Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance (Department of Revenue) has issued a circular giving clarification on various issues pertaining to the amount paid as a pre-deposit under sub-section (6) of section 107 or sub-section (8) of section 112 of the CGST Act.

For the acceptance of appeals filed under sub-section (6) of section 107 or sub-section (8) of section 112 of the Central Goods and Services Tax (CGST) Act, 2017, a pre-deposit is required to be paid. Regarding the same pre-deposit, the board has received multiple representations from trade and industry highlighting issues associated with it.

The board has noted that there are various interpretations regarding pre-deposit payment, which has caused confusion among stakeholders. In conclusion, litigation has increased over time. Stakeholders are confused about the correct procedural and compliance requirements for making pre-deposits.

Consequently, in order to ensure the implementation of section 112 of the CGST Act 2017 uniformly across all the regions, the CBIC has issued a clarification in exercise of its powers granted under sub-section (1) of section 168 of the CGST Act.

In the clarification, the board has answered six of the most common questions among stakeholders. One such question is, "When the Appellate Authority or Appellate Tribunal issues an order, should it be required to explicitly state that the predeposit paid by the appellant must be refunded?"

In answer to this question, the CBIC has clarified that when an amount paid by the appellant under sub-section (6) of section 107 or sub-section (8) of section 112 is required to be refunded in consequence of any order passed by the Appellate Authority or Appellate Tribunal. The board has further clarified that it is not always necessary to mention that the pre-deposit is required to be deposited in such an order.

The CBIC further states that when the appellant receives the order, he/she is required to file the refund claim in respect of the pre-deposit by filing FORM GST RFD-01.

For complete information, refer to the official circular released by the CBIC.