Summary
CBIC Circular No. 224/18/2024-GST: Recovery of GST Dues Pending GSTAT
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 224/18/2024-GST dated 11 July 2024, issued guidelines on recovery of outstanding GST dues in cases where the first appellate authority has confirmed a demand, wholly or partly, but the taxpayer cannot file an appeal before the GST Appellate Tribunal because it is not operational.
The circular also clarifies the treatment of certain payments made through FORM GST DRC-03 and their adjustment against the pre-deposit required for filing an appeal.
1. Payment of Pre-Deposit Where the Tribunal Is Not Operational
Where a taxpayer intends to appeal against an order of the first appellate authority but cannot file the appeal because the GST Appellate Tribunal is not operational, the taxpayer may pay an amount equal to the prescribed pre-deposit through the GST portal under:
Services → Ledgers → Payment towards demand
The payment is mapped against the selected demand in Electronic Liability Register Part-II and is adjusted against the pre-deposit required when the appeal is filed before the Tribunal.
The taxpayer must also submit an undertaking or declaration to the jurisdictional proper officer stating that the appeal will be filed within the applicable statutory timeline once the Tribunal becomes operational.
On payment of the required amount and submission of the undertaking, recovery of the remaining confirmed demand stands stayed in accordance with Section 112(9) of the CGST Act, as clarified by the circular.
2. When Can Recovery Proceedings Be Initiated?
If the taxpayer neither pays the amount equal to the prescribed pre-deposit nor submits the required undertaking or declaration, recovery proceedings may be initiated in accordance with law.
Similarly, once the Tribunal becomes operational, the taxpayer must file the appeal within the applicable timeline. Failure to do so may result in recovery of the remaining demand.
3. Adjustment of Payment Made Through FORM GST DRC-03
The circular addresses cases where a taxpayer intended to pay a particular GST demand but inadvertently made the payment through FORM GST DRC-03, including under the voluntary or other category.
Under Rule 142(2B) of the CGST Rules, 2017, and FORM GST DRC-03A, a mechanism was introduced to adjust eligible DRC-03 payments against the relevant demand.
Where the taxpayer has submitted the prescribed FORM GST DRC-03A application, the payment may be treated as having been made towards the relevant demand on the date of the original DRC-03 intimation. Such payment may also be adjusted against the applicable pre-deposit under Sections 107 or 112 of the CGST Act, subject to the prescribed conditions.
This mechanism is not available where proceedings relating to the DRC-03 payment have already been concluded by an order in FORM GST DRC-05 under Rule 142(3).
4. Procedure Where FORM GST DRC-03A Functionality Is Unavailable
The circular also addressed the situation prevailing when the DRC-03A functionality was not available on the common portal.
In such cases, where the pre-deposit had inadvertently been paid through DRC-03 instead of through Electronic Liability Register Part-II against the relevant demand, the taxpayer could intimate the proper officer. The officer was advised not to insist on recovery of the remaining amount until the DRC-03A functionality became available, subject to the circular's conditions.
Once the functionality became available, the taxpayer was required to submit FORM GST DRC-03A at the earliest. Failure to do so could lead to recovery proceedings under Sections 78 and 79 of the CGST Act.
5. Practical Implications for Taxpayers
Taxpayers dealing with confirmed GST demands should review:
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Whether the first appellate authority has confirmed the demand.
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Whether the prescribed pre-deposit has been paid through the appropriate portal mechanism.
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Whether the required undertaking or declaration has been submitted.
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Whether an earlier DRC-03 payment can be adjusted against the demand through FORM GST DRC-03A.
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Whether any order in FORM GST DRC-05 has already concluded the relevant proceedings.
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Whether the appeal is filed within the applicable statutory timeline once the Tribunal becomes operational.
The treatment of a particular demand depends on the applicable legal provisions, payment records, procedural compliance and current status of the appellate mechanism.
Official Reference
CBIC Circular No. 224/18/2024-GST dated 11 July 2024.
Need Assistance with a GST Recovery Notice or Appeal?
If you have received a GST recovery notice or need to examine the adjustment of a DRC-03 payment against an appeal pre-deposit, a review of the demand order, payment records and appeal status may help clarify your legal position.
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Disclaimer: This article is for general informational purposes only and does not constitute case-specific legal advice.