Advisory on the Payment of pre-deposit while filing of appeal before First Appellate authority

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This advisory explains how taxpayers can properly account for pre-deposits when appealing a demand order. Often, payments made voluntarily via Form GST DRC-03 are not automatically linked to a specific Demand ID in the electronic liability register. To resolve this, users must submit Form GST DRC-03A, which maps previous payments to the relevant debt. Once this link is established, the GST portal will recognise the settled amount and allow the appeal filing without requesting redundant payments.

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Q1. What problem is this advisory addressing?

This advisory addresses a common issue where taxpayers pay some amount during investigation through DRC-03, but later while filing an appeal, the GST portal still asks them to pay the pre-deposit again, even if they have already paid sufficient amount earlier.

Q2. Why does the GST portal not consider payment made through DRC-03?

The GST portal does not consider DRC-03 payment because such payments are not automatically linked to the specific demand order. Since they are not mapped to the Demand ID, they do not get reflected as adjusted payment in the Electronic Liability Register.

Q3. What is a Demand ID and why is it important?

A Demand ID is generated when a demand order such as DRC-07 is issued. It acts as a reference against which payments are tracked, and only payments linked to this Demand ID are recognized by the system for adjustment.

Q4. Which payments are automatically considered by the GST system?

Only those payments which are made using the “Payment towards Demand” option on the GST portal are automatically linked to the Demand ID and reflected in the Electronic Liability Register.

Q5. How does the GST portal determine the pre-deposit requirement at the time of appeal?

The GST system calculates the total amount required for filing an appeal by adding the admitted amount and the prescribed pre-deposit. It then checks how much amount has already been paid against the Demand ID in the liability register.

Q6. What happens if sufficient amount is already paid against the Demand ID?

If the amount already paid and linked to the Demand ID is equal to or more than the required amount, the system allows the taxpayer to file the appeal without asking for any additional payment.

Q7. What happens if the payment linked to the Demand ID is less than required?

If the amount linked to the Demand ID is less than the required amount, the portal will require the taxpayer to pay the balance amount before allowing the appeal to be filed.

Q8. What is the core issue with DRC-03 payments in this context?

The core issue is that DRC-03 payments remain unlinked to the Demand ID, which means the system does not treat them as payment against the demand while calculating the pre-deposit requirement.

Q9. What is the solution provided in this advisory?

The advisory provides that taxpayers should file Form GST DRC-03A to link the payment made through DRC-03 with the relevant Demand ID so that the system can recognize it. Once DRC-03A is filed, the earlier DRC-03 payment gets mapped to the demand order, appears in the Electronic Liability Register, and is considered while calculating the pre-deposit requirement.

The taxpayer should first file DRC-03A to properly link the payment with the Demand ID and only then proceed with filing the appeal to avoid unnecessary additional payment.