Taxes are the primary source of revenue for the Government, whether Direct or Indirect. The GST Act mentions the provision for bringing up a demand order for the tax and reclaiming the same where it is unpaid, paid in short, or incorrectly used as input tax credit.
A demand order under GST comprises a written notice dispatched through the official channel to the taxpayer if the GST authority believes that the taxpayer incurs any taxes under the GST Act. It is a formal notice circulated by the GST officer to the taxpayer if he/she has an outstanding tax liability.
Whether the taxpayer is enrolled under GST or not, he/she can submit an appeal against such an order within three months from the date of getting the notice. This guide covers the process of filing an appeal against a demand order and the steps for instituting a reply to the demand order.
Overview of Demand Order under GST
Tax authorities circulate a demand order under GST (Goods and Services Tax) in the event of a shortfall in tax payment, improper use of input tax credit, or any other non-compliance with GST laws. The recovery and demand provisions are initiated to ensure the proper amount of tax payment.
Qualification to Appeal against Demand Order under GST
Taxpayers enrolled for GST, or unregistered persons, who disagree with a decision or order from an adjudicating official can appeal to the Appellate Authority within 3 months of the order’s communication or issuance. An appeal is only permissible after the adjudicating authority has circulated a formal order.
Appeals against demand orders are contingent on the specified additional conditions:
A pre-deposit of at least 10% of the disputed tax is required by law before filing an appeal. Nevertheless, authorities can change this percentage to a lesser amount.
Appeals against demand orders can be submitted using an Electronic Verification Code (EVC) or Digital Signature Certificate (DSC). LLPs and Companies must utilize a DSC for such appeals.
Procedure to File First Appeal against Demand Order
Conditions required to introduce an appeal:
- The taxpayer is qualified to petition an appeal to the Appellate Authority only if the adjudicating authority has issued an order.
- Ensure that a PDF reader is set up on your computer to access the PDF file carrying the order.
Stepwise Procedure:
Step 1: Enter the GST portal and log in.
Step 2: Maneuver to Services > User Services > My Applications.
- On the ‘My Applications’ page, select the application type as ‘Appeal to Appellate Authority’ and select ‘New Application.’
- The ‘GST APL-01-Appeal to Appellate Authority’ page will display.
Step 3: Define the order type as ‘Demand Order’ and enter the order number. Choose search.
- The orders page will come up.
Step 4: From the drop-down list, choose one or more categories of the case under Discord and select Add.
- A list of cases comes on display.
- The taxpayer can edit the period of dispute and the date of communication.
Step 5: Upload the annexure to GST APL-01. On the order page, select the ‘click here’ link.
- Download GST APL-01’s template, update the particulars in the annexure, save the file as ‘AplAnnexureTemplate.pdf,’ and upload it.
Step 6: Update the disputed payment/amount details by selecting the ‘Disputed Payment/amount details’ button on the order page.
- Please enter the amount under disagreement by classifying it as per the tax head, interest, or late fee.
- The amount of Demand generated and admitted is instantly displayed.
- Mark: Demand admitted = Demand generated – Amount disputed.
- Enter the percentage value of the pre-deposit, fixed at a minimum of 10% of the amount disagreed.
- A lower percentage needs endorsement from the authority, and the ‘Details of Payment required’ table is auto-completed.
- Enter the place of supply particulars for the amount of demand admitted.
- Select the payment method: ITC or cash in the electronic ledger.
Step 7: If required, include supporting documents, furnish a document description, and select the file for upload.
Step 8: Preview the Application by choosing the ‘Preview’ button. Download the PDF file to authenticate the details.
Step 9: Continue to file – Select the declaration checkbox, select the authorized signatory, and input the place to continue with filing.
- You can choose to submit and continue to file with EVC or DSC. Upon effective submission, a confirmation message will appear.
Procedure to Reply During an Appeal Proceeding
The Appellate Authority has the choice to launch proceedings and hold hearings for the resolution of an appeal or may summon the appellant while reviewing the tax department’s appeal application. To react during an appeal proceeding, taxpayers should observe the following steps:
- Log in to the GST website and maneuver to Services > User Services > View Additional Orders/Notices.
- On the case particulars page with the defined Case ID, choose the notice tab and then select the reply option. This action brings up a page titled ‘Submit a reply to the notice.’
- Upload the reply file, attach backing documents, validate the checkbox, and then choose the ‘File Reply’ button.
A warning message will be displayed. Choose to proceed and then submit with EVC or DSC. An acceptance will be shown upon the reply’s effective upload.
Process to File a Rectification Request of an Appeal
Process for Submitting a Rectification Request for an Appeal:
- Step 1: Sign in to the GST portal.
- Step 2: Maneuver to Services > User Services > View Additional Orders/Notices. Select ‘View’ on the ‘Additional Orders/Notices’ page.
- When you click on it, the Case Details page will be shown.
- Step 3: Access the ‘Orders’ tab and choose ‘Initiate rectification.’
- Step 4: The ‘Initiate rectification’ page will display. Select the appropriate reason for rectification and upload any essential supporting documents. Next, click on ‘Initiate’ and continue to submit with either EVC or DSC.
Upon successful submission, a message will display, suggesting the rectification request number.
Types of Appeal Statuses
The following statuses are displayed for the corresponding situations.
| S. No | Description | Status |
| 1 | Appeal Form filed successfully | Appeal Submitted |
| 2 | Appeal Form rejected | Appeal Rejected |
| 3 | When Show Cause Notice is issued | Show Cause Notice Issued |
| 4 | Appeal Form admitted successfully | Appeal Admitted |
| 5 | When a Hearing Notice is issued | Hearing Notice Issued |
| 6 | When a hearing is adjourned, and the next date is issued | Adjournment Granted |
| 7 | When a Counter-Reply is received against the Notice | Counter-Reply Received |
| 8 | Appeal is modified/ confirmed/ rejected | Appeal Order Passed |
| 9 | When an Application is filed for Rectification | Rectification Request Received |
| 10 | The appeal rectification order is passed | Rectification Order Passed |
| 11 | When an Application for Rectification is rejected | Rectification Request Rejected |
Late Filing GST Appeal
The appellate authority may forgive the delay for a maximum of 1 month if it is satisfied that the taxpayer was unable to present an appeal within the stated period of 3 months and would permit it to be submitted within 1 month following the expiry date of filing the Appeal under tolerable causes.
Final Acceptance
When an appeal is submitted against a demand order, a notification in the shape of a text message or an email would be dispatched to the unregistered person or taxpayer and the Appellate Authority. When an electronic filing of the Appeal is performed, the relevant documents, along with the verification portion of the Appeal, have to be deposited to the Appellate Authority within 7 days of the electronic filing. The appeal documents are checked, and a final acknowledgement is issued if the entire record is intact. The appeal is regarded to be effectively filed only when the appeal number is assigned with the final statement.
Bottom Line
The appeal procedure against a GST demand order involves a systematic approach. Whether registered under GST or not, one can submit an appeal within 3 months of getting the notice. The procedure documented here, step by step, starting from accessing the GST portal to filing requisite documents, informs users on how to submit an appeal, respond during hearings, and make rectification requests. Hence, it is advisable to take the help of taxation professionals who will assist in a hassle-free GST compliance process.
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