Issue in Filing Appeals on the GST Portal
Issue in Filing Appeals on the GST Portal Where Demand Order Shows “NIL” Liability Despite Prior Voluntary Payment
1. Background
GSTN has observed that some taxpayers encounter difficulties when attempting to file appeals on the GST portal against adjudication orders that display the demand amount as “NIL.”
This issue generally occurs when a taxpayer has already paid tax, interest, or penalty—either fully or partly—at the stage of the Show Cause Notice (SCN). In many such cases, the payment is made without accepting the liability. However, during adjudication, the authority may treat the earlier payment as settlement of the demand and issue an order without clearly determining or recording the tax liability. As a result, the final order reflects a zero demand.
2. System Functionality on the GST Portal
When a demand order is issued by a tax officer, the GST portal automatically generates a Demand ID in the Demand and Collection Register (DCR), which forms part of the taxpayer’s liability ledger.
If the order reflects a NIL demand, the system records the liability as zero. When a taxpayer then attempts to submit an appeal in Form GST APL-01, the portal may prevent the filing and show an error message such as:
“Disputed amount cannot be greater than the demand amount.”
Because the portal does not record any outstanding demand, the system does not allow the taxpayer to proceed with the appeal.
3. Clarification on the Issue
The following points are clarified:
- A payment made during the SCN stage, without expressly accepting the liability, should not be treated as an admission of the demand.
- In such situations, the taxpayer still has the legal right to challenge the liability by filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017.
However, if the adjudication order reflects NIL demand, the portal does not allow the taxpayer to exercise this right due to the absence of a recorded liability in the system.
4. Suggested Course of Action
Where a dispute regarding tax liability continues but the demand order does not capture the liability—particularly in cases where payment was made before issuance of the order—the taxpayer should request a rectification from the adjudicating authority.
Such requests can be submitted through the rectification facility available on the GST portal. After the authority issues a rectification order showing the appropriate demand amount, the taxpayer may proceed to file the appeal on the portal within the applicable statutory timelines.
Also Read: GST ITC Set-Off Rules Changed from January 2026 — A Practical Guide for Taxpayers
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