Advisory on Payment of Pre-Deposit While Filing an Appeal
Advisory on Payment of Pre-Deposit While Filing an Appeal Before the First Appellate Authority
Taxpayers sometimes make voluntary payments during the investigation stage using Form GST DRC-03. However, issues are often reported at the time of filing an appeal against a demand order, where the GST portal still asks for payment of the mandatory pre-deposit even though the taxpayer may have already paid an amount equal to or greater than the required pre-deposit.
To clarify this issue, the following points should be noted:
1. Creation of Demand in the Liability Register
When a demand order is issued (for example, through Form GST DRC-07), a Demand ID is automatically generated and recorded in Part II of the Electronic Liability Register on the GST portal.
If a taxpayer makes a payment using the “Payment Towards Demand” option on the portal, the amount is directly adjusted against the relevant Demand ID in the register.
However, payments made through Form GST DRC-03 are treated as voluntary payments and are not automatically linked to any specific Demand ID. As a result, such payments do not appear as adjusted against the demand in the Electronic Liability Register.
2. System Check While Filing an Appeal
When a taxpayer files an appeal, the GST system automatically calculates the amount that must be paid before the appeal can be submitted. This includes:
- The admitted liability, if any, and
- The statutory pre-deposit required for filing the appeal.
The system then verifies whether any payment has already been made against the relevant Demand ID in the Electronic Liability Register.
- If the amount already paid is equal to or greater than the required amount, the portal allows the appeal to be filed without asking for any additional payment.
- If the amount paid is less than the required amount, the system will require the taxpayer to pay the remaining balance before the appeal can be submitted.
3. Treatment of Payments Made Through Form GST DRC-03
Since payments made through Form GST DRC-03 are not automatically linked to a specific Demand ID, they are not considered by the GST portal while calculating the pre-deposit requirement for filing an appeal.
To ensure that such payments are taken into account, the taxpayer must link the payment made through DRC-03 with the relevant demand order.
4. Linking DRC-03 Payment with Demand Using Form GST DRC-03A
Taxpayers can link a voluntary payment made through Form GST DRC-03 with a specific demand order by filing Form GST DRC-03A on the GST portal.
Once Form GST DRC-03A is submitted:
- The payment made through DRC-03 gets mapped to the relevant Demand ID, and
- The corresponding adjustment becomes visible in the Electronic Liability Register.
5. Impact While Filing an Appeal
After the payment is successfully linked through Form GST DRC-03A, the GST system will recognize the earlier payment when the taxpayer files an appeal. Consequently, if the payment already made satisfies the required pre-deposit amount, the portal will not ask for any additional payment.
6. Advisory for Taxpayers
Taxpayers who have made payments through Form GST DRC-03 in respect of a demand order are advised to file Form GST DRC-03A to link the payment with the relevant Demand ID before filing the appeal, wherever applicable.
For step-by-step instructions on linking a Demand ID with a DRC-03 payment through Form GST DRC-03A, taxpayers may refer to the user manual available on the GST portal.
Also Read: GST ITC Set-Off Rules Changed from January 2026 — A Practical Guide for Taxpayers
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