A GST appeal is not admitted until the pre-deposit is paid. You pay the full admitted amount plus a percentage of the disputed tax: 10% under section 107(6) to the Appellate Authority, and — since the Finance (No.2) Act, 2024 — 10% under section 112(8) to the Appellate Tribunal, reduced from the 20% that applied before 1 November 2024.
What a pre-deposit is
A pre-deposit is not a penalty and it is not a payment of the demand. It is the condition on which an appeal is entertained at all. File the appeal without it and the appeal is not defective in some curable, clerical sense — it is simply not admitted.
Two components make it up, and they are treated quite differently:
- The admitted portion — paid in full. Whatever part of the demand you accept — tax, interest, fine, fee and penalty — has to be paid in full. There is no percentage on this part.
- The disputed portion — paid as a percentage. Only the part you are actually contesting attracts the percentage, and the percentage is charged on the tax in dispute, not on the interest or penalty riding on it.
That second point is where most miscalculations start. A demand of ₹10 lakh tax with ₹4 lakh interest and ₹1 lakh penalty, fully disputed, gives a section 107 pre-deposit of 10% of ₹10 lakh — not 10% of ₹15 lakh.
The rates at each stage
| Stage | Provision | Pay in full | Pay on the disputed tax |
|---|---|---|---|
| First appeal — Appellate Authority | Section 107(6) | The admitted amount, in full | 10% |
| Second appeal — Appellate Tribunal | Section 112(8) | The admitted amount, in full | 10% (was 20% before 1 November 2024) |
Until 1 November 2024 the Tribunal stage carried 20% of the remaining disputed tax, over and above the 10% already paid at the first-appeal stage. The Finance (No.2) Act, 2024 brought it down to 10%.
A great deal of older commentary, and a good many templates and checklists, still say 20%. If you are reading a source that does, check its date before you budget from it.
The monetary ceilings on the pre-deposit were also revised by the same amendment. Ceilings are revised more often than rates, so verify the current cap against the CGST Act as it now stands before relying on one — no figure for the cap is stated here.
Which ledger you may pay from
This is settled and it matters commercially, because paying from the credit ledger costs no cash.
Where the demand is for output tax, the pre-deposit may be paid from the electronic credit ledger. That follows from section 49(4) and was confirmed by CBIC in Circular CBIC-20001/2/2022-GST dated 6 July 2022. The Supreme Court dismissed the Department's challenge in Yasho Industries, so the position is not open.
The limits to keep in mind:
- The credit ledger route is for output tax demands. Liabilities that must be discharged in cash — reverse charge being the standard example — cannot be met from credit.
- Interest, penalty and late fee are cash-ledger items. They cannot be paid from credit.
Three situations that regularly go wrong
1. A duplicated demand
Where the same liability has been demanded twice — commonly the same period raised again in a second order — a second pre-deposit is not payable on the duplicate. Amounts already deposited during investigation are also adjustable against the pre-deposit. Both propositions come from Rajesh Tanwar.
2. The deposit was missed by oversight
An appeal rejected because the pre-deposit was inadvertently not paid is curable. In Arun Traders the appeal was restored on the deposit being made within two weeks. Do not treat a rejection on this ground as the end of the matter — but do not rely on the indulgence either.
3. Counting the percentage on the wrong base
The percentage runs on the disputed tax. Adding interest and penalty into the base inflates the deposit; applying the percentage to the whole demand including the admitted part does the same. Both are common, and both cost cash that did not need to leave the business.
Working out the figure
- Split the demand into admitted and disputed.
- Within the disputed part, isolate the tax from interest, penalty, fine and fee.
- Pay the admitted part in full, in the correct ledger.
- Apply the percentage — 10% under section 107(6) — to the disputed tax only.
- Check the ceiling as it currently stands, and check whether any investigation deposit or earlier stage deposit is adjustable.
- Decide the ledger: credit ledger where the demand is output tax; cash for interest, penalty and anything payable in cash.
Common mistakes
- Budgeting 20% for the Tribunal stage from a source written before 1 November 2024.
- Applying the percentage to the whole demand instead of the disputed tax.
- Paying from cash when an output-tax demand could have been met from the credit ledger.
- Paying a second time on a demand that duplicates one already deposited against.
- Ignoring investigation deposits that are adjustable.
- Treating a rejection for non-payment as final when it is curable.
- Quoting a monetary ceiling from an older article without checking the current figure.
For how the courts have actually applied section 107(6) — the credit-ledger question, duplicated demands and curable defaults — see Section 107 pre-deposit: the credit ledger and duplicated demands.
Key Facts About Pre-Deposit for GST Appeals
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
How much is the pre-deposit for a GST appeal?
The full admitted amount, plus 10% of the disputed tax under section 107(6) for an appeal to the Appellate Authority. At the Appellate Tribunal under section 112(8) it is a further 10% of the remaining disputed tax, reduced from 20% by the Finance (No.2) Act, 2024 with effect from 1 November 2024.
Is the percentage charged on the whole demand?
No. It is charged on the disputed tax only. The admitted portion is paid in full separately, and interest, penalty, fine and fee are not part of the base on which the percentage is calculated.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Pre-Deposit for GST Appeals: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.