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Writer's pictureRashmita Choudhary

Understanding the Basics of GST Appeal

Updated: Oct 1

Understanding the Basics of GST Appeal

In GST, the problems that illustrate the nature of the disagreement between the revenue and the assessee are known as grounds of appeal. An appellant may contemplate filing an appeal if they believe that any findings, observations, or conclusions stated by the authority issuing the order have wronged them. The administration is getting ready to implement an online post-audit feature. Businesses must be aware of the specifics of Departmental Audits and GST litigation to ensure that they are well-equipped to defend their positions, especially in light of the constantly changing nature of the law. In this article, we will explain the basics of GST appeal.

 

Table of content

 

What is a GST Appeal?

Any legal appeal is an effort to have a higher court reconsider a lower court's decision. Appeals are made in cases of legal difficulty or conflict. For additional information, see our piece on Legal Disputes and GST Appeals. A two-tiered appeal process is provided by the GST law to settle issues and ensure compliance. The Adjudicating Authority is the first level of appeal, and the Appellate Authority is the second level. 


What are Disputes?

Any law, including tax laws, imposes obligations. There are two main categories of these obligations: procedure-related and tax-related. The tax officer verifies the compliance of a taxpayer with these requirements. Situations of apparent or actual non-compliance are possible from time to time. If the disagreement doesn't go away, it turns into a dispute that needs to be settled. A departmental official resolves this dispute in the beginning through a quasi-judicial procedure, leading to the issuance of an initial order known by a number of names, including assessment order, adjudication order, order-in-original, etc. The Board, the First Appellate Authority, and the Appellate Tribunal are not included in the definition of "adjudicating authority" under the GST Act, which defines it as any authority qualified to make any order or decision under this Act. Therefore, every judgement or order made in accordance with the Act can be considered a form of "adjudication."


Grounds of Appeal under GST

The following are the grounds for an appeal under GST:

  • Illegal Demand: If a taxpayer feels that the tax demand is improper or illegal, they may file an appeal.

  • Penalties: If a taxpayer feels that the penalty they have been assessed is unfair or erroneous, they have the right to file an appeal.

  • Classification: If a taxpayer feels that a commodity or service has been incorrectly classified, they may file an appeal.

  • Valuation: Should a taxpayer feel that the assessment of goods or services is inaccurate, they have the right to file an appeal.

  • Refunds: If a taxpayer feels that their refund application has been unfairly denied or postponed, they may file an appeal.


Drafting Grounds of Appeal in GST

The concerns that illustrate the nature of the disagreement between the assessee and the revenue are represented by the grounds of appeal in the GST. Since a ground of appeal is essentially a claim, it differs from arguments in that arguments are presented to bolster the claim. A claim may have multiple justifications, but none of them may serve as the basis for an appeal. Here are some pointers for creating impactful grounds of appeal:

  • All of the GST appeal memoranda must be written in English.

  • The grounds for appeal must be clear and succinct. 

  • Every ground needs to have its own unique head.

  • Even if such arguments or narratives are necessary to highlight the nature of the dispute, grounds cannot include any of these things. 

  • The grounds ought to be numbered sequentially.


Steps of Appeal under GST

Step 1: First, go to the GST portal and register.

Step 2: Select My Applications under Services > User Services. Select the 'Appeal to Appellate Authority' application type from the 'My Applications' screen, then click 'New Application.' It will display the 'GST APL-01-Appeal to Appellate Authority' page. 

Step 3: Enter the order number and select "Demand Order" as the order type. Press the "Search" button. You will be taken to the orders page.

Step 4: Choose one or more categories related to the disputed matter from the drop-down box and click "add." There will be a list of cases shown. The taxpayer has the ability to modify the communication date and the dispute period.

Step 5: Click the 'click here' link on the order page to upload the annexure to GST APL-01. After downloading and editing the GST APL-01 template, save the file as "AplAnnexureTemplate.pdf" and upload it. 

Step 6: Go to the order page and click the 'Disputed amount/Payment information' button to update the disputed amount and payment details. Sort the amount by tax head, late fee, or interest to enter the amount disputed. Demand produced and admitted amounts are automatically shown. Enter the pre-deposit percentage, which must be at least 10% of the amount being contested. The 'Details of Payment necessary' table is automatically filled in, and a lower percentage needs authority permission. For the quantity of demand accepted, enter the location of supply data. Select the payment option in the electronic ledger: cash or ITC.

Step 7: Select the file to upload, give a document description, and attach any supporting documentation that may be required. 

Step 8: Select the 'Preview' button to see a preview of the application. To confirm the details, download the PDF file.

Step 9: To continue with filing, check the declaration box, choose the authorised signatory, and enter the location. Proceed to file with DSC or EVC by clicking submit. A confirmation message will appear after the submission is successfully completed.


Steps of Appeal under GST

Time Limit, Fees, and General Rules for Filing GST Appeal

An applicant has three months from the date of communication of the challenged order to file an appeal with the Appellate Authority. Additionally, an extension of one month may be granted by the Appellate Authority if they find that there was a legitimate reason for the delay. All appeals need to be filed using the official forms and include the necessary fees. The complete amount of tax, interest, fine, fee, and penalty resulting from the contested order, as acknowledged by the appellant, plus 10% of the amount in dispute, shall be the fee. Fees won't be charged in situations where an officer or the Commissioner of GST files an appeal.


Appealable Orders and Authorised Representatives

The following are the orders that the person who feels wronged can seek an appeal against: 

  • Assessment or Demand Order

  • Assessment Non-Demand Order 

  • Enforcement Order 

  • Registration Order 

  • Refund Order 

  • LUT Order

Unless the Act requires them to appear in person, any person who is obliged to appear before a GST Officer, First Appellate Authority, or Appellate Tribunal may designate an authorised representative to appear on their behalf. An authorised agent may be: 

  • A family member 

  • A regular employee

  • A lawyer with practice in any Indian court 

  • Any company secretary, cost accountant, or chartered accountant holding a current certificate of practice 

  • A former member of the Excise or Tax departments of any state government, with a minimum Group-B gazetted officer rank 

  • Any person who prepares tax returns 

Within a year following their retirement, retired officers are not permitted to represent the concerned party.


When Can a GST Appeal Not be Filed?

To limit the number of appeals filed and prevent unnecessary litigation costs, the Board or the State Government may, at the suggestion of the Council, set financial limitations for appeals being made by the GST officer. Is it possible to challenge every decision? No. A GST officer's rulings regarding the following cannot be appealed: 

  • A directive to switch the officer handling the proceedings; 

  • An order to confiscate or keep documents, including books of accounts;

  • A sanction order under the Act authorising prosecution; or

  • An order allowing the installment payment of taxes and other sums

An individual may file an appeal with the First Appellate Authority if they are dissatisfied with any ruling or order made under GST against them by an adjudicating authority.  They have the right to appeal to the National Appellate Tribunal, the High Court, and the Supreme Court if they are not satisfied with the ruling of the First Appellate Authority.


Withdrawal of a GST Appeal

At the 48th meeting of the GST Council, it was determined to offer the opportunity to withdraw a previously filed GST appeal. The goal of this action was to lessen the volume of lawsuits that the appellate authorities must handle. In this context, Notification No. 26/2022-Central Tax introduced a new Rule 109C into the CGST Rules. As per Rule 109C, the petitioner has the option to withdraw their appeal application at any time before the show-cause notice or the Section 107(11) order is issued, whichever comes first. Regarding appeals filed with Form GST APL-01 or Form GST APL-03, this is relevant. The appeal withdrawal application must be submitted using the updated Form GST APL-01/03W. 

When the final acknowledgement in Form GST APL-02 has been sent, the appellate authority's consent is needed to withdraw the related appeal. After the petitioner files the application for withdrawal of the appeal, the appellate authority has seven days to rule on it. An appellant may submit a new appeal within the time frames outlined in Section 107 following such withdrawal.


Conclusion

A methodical strategy must be taken while appealing a GST demand order. Taxpayers have three months from the date of notice to file an appeal, regardless of whether they are enrolled for GST or not. This procedure walks users through filing an appeal, responding to proceedings, and starting rectification requests. It starts with visiting the GST portal and ends with supplying pertinent documents. On the other hand, GST compliance's complexity can be frightening. As a result, it is advised to seek the assistance of tax professionals who can guarantee a seamless GST compliance procedure.


FAQ

 Q1. What is the process of a GST appeal?

When an adjudicating court issues an order that dissatisfied a person or taxpayer, they have three months—which can be extended by one month—to file an appeal using form APL-01. Along with it must be the reasons for the appeal and a verification form that the appellant has properly signed


Q2. Should every appeal be made to both CGST and SGST authorities? 

No, CGST and SGST/UTGST officers have the authority to issue orders in accordance with the GST Act. An order made under the CGST will be presumed to apply to the SGST as well, per the Act. If an order has been issued by a CGST officer, however, only CGST officers may file an appeal, review, revision, or rectification against the order. Similarly, with regard to SGST, the appropriate SGST officer alone will be the party to review, amend, or correct any order issued by the SGST officer.


Q3. Can an appeal be filed after 90 days in GST?

The Central Goods and Services Tax Act, 2017 stipulates that a first appeal must be filed within 90 days, with the appellate body having the option to extend this time by 30 days.


Q4. What is the GST appeal fee?

Every applicant must pay the entire amount due, including the tax, fine, interest, and penalty from the first order, in order to submit an appeal with the Appellate Tribunal. In the event of a dispute, the applicant must pay GST appeal expenses equal to 20% of the total amount.


Q5. Is it necessary to deposit 10% of the disputed tax? 

Before submitting an appeal, a minimum of 10% of the contested tax must be paid as pre-deposit (as required by law). After receiving clearance from the relevant authorities, a lower proportion may be announced.


Q6. Can a GST appeal be withdrawn?

An assessee may submit an application to withdraw the appeal using Form GST APL-01W, and the department may submit one using Form GST APL-03W. In the event that an appeal is lodged with the first appellate authorities, this facility is available.


Q7. What is the time limit for filing a GST appeal?

The appeal must be filed within three months of the day the order is received, in accordance with the deadline set forth in Section 112 of the CGST Act, 2017.


Q8. Who is the highest authority for GST appeals?

On significant legal issues, an appeal from a State Bench decision will go to the jurisdictional High Court, whereas an appeal from a National Bench decision will go directly to the Supreme Court.


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