Published 28 October 2026
To file an appeal against a GST order, a taxpayer has to pay part of the amount first. Officers and taxpayers have read the rules differently, especially for the second appeal and for refunds. On 26 October 2026 the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 259/05/2026-GST to settle six questions. This article explains each in plain terms.
The basic rule
For an appeal to the Appellate Authority, section 107(6) requires the appellant to pay:
- the admitted amount in full, meaning the tax, interest, fine, fee and penalty, and
- a sum equal to 10 per cent of the remaining tax in dispute.
For an appeal to the Appellate Tribunal, section 112(8) requires the same two payments, and this is in addition to the amount already paid for the first appeal.
1. What is the “admitted amount” and what is “tax in dispute”?
- The admitted amount is the part of the tax, interest, fine, fee and penalty in the order that the taxpayer accepts as payable and does not challenge. It must be paid in full before the appeal is filed.
- The part the taxpayer contests is the tax in dispute. The 10 per cent pre-deposit is worked out on this tax component.
- The taxpayer decides, when filing, which part is admitted and which is disputed. This is recorded in Table 14 of FORM GST APL-01 and Table 20 of FORM GST APL-05.
2. Pre-deposit for the Tribunal when the first appeal changed the demand
If the Appellate Authority has modified the liability, the 10 per cent is worked out on the tax in dispute as confirmed by the Appellate Authority and still disputed by the appellant. It is not worked out on the original demand. This amount is in addition to what was paid at the first appeal.
3. Must the appeal order say “refund the pre-deposit”?
No. The order need not mention a refund of the pre-deposit. When the order leads to a refund, the taxpayer applies in FORM GST RFD-01 and selects serial number 7, “on account of order”.
4. Can the refund be withheld because the department may appeal?
No. Where the Appellate Authority or Tribunal decides in favour of the appellant and the appellant applies for the refund, the pre-deposit is refundable. The refund is not to be denied merely because the department intends to appeal, or has appealed, against the order. The exception is where the order is stayed by the Tribunal or a court.
5. From which date does interest run on a refunded pre-deposit?
Pre-deposits are paid separately at the first appeal stage and at the Tribunal stage. Section 115 gives interest from the date the amount was paid. The circular says the interest date is fixed separately for each level, using the actual date on which each payment was made.
6. What if the Tribunal sends the case back?
- If the Tribunal remands the matter to the original adjudicating authority, the appellant is eligible for refund of the pre-deposit, which is to be granted within the prescribed time.
- If it is a partial remand and part of the demand is upheld, the refund is released only after the amount confirmed against the taxpayer has been recovered or adjusted from the pre-deposit, with interest as applicable. The balance is then refunded.
Practical points
- Decide in advance which part of the demand is admitted. Paying the admitted portion in full is a condition for the appeal.
- Keep proof of the date of each payment. The date at each level fixes the start of interest.
- After a favourable order, file RFD-01 under “on account of order”. A department appeal does not by itself stop the refund.