Pre-deposit made through E-credit ledger is valid under GST

Last updated: 31 August 2023

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Quick Summary

The Orissa High Court has ruled that a pre-deposit required for a GST appeal can be made using the Electronic Credit Ledger (ECL). This decision overturns an earlier rejection of an appeal where the pre-deposit was debited via the ECL. The court referenced a CBIC circular from July 2022, which clarified that such payments are permissible.

Court :
Orrisa High Court

Brief :
The Hon'ble Orrisa High Court in M/s. Kiran Motors v. Addl. Commissioner of CT & GST [W.P (C) No.22817 of 2023 of August 10, 2023] set aside the appeal rejection order passed by the 1st Appellate Authority and held that a pre-deposit under GST can be made through electronic credit Ledger ("ECL").

Citation :
W.P (C) No.22817 of 2023 of August 10, 2023

The Hon'ble Orrisa High Court in M/s. Kiran Motors v. Addl. Commissioner of CT & GST [W.P (C) No.22817 of 2023 of August 10, 2023] set aside the appeal rejection order passed by the 1st Appellate Authority and held that a pre-deposit under GST can be made through electronic credit Ledger ("ECL").

Facts

M/s. Kiran Motors ("the Petitioner") field first appeal before the 1st Appellate Authority who vide order dated March 31, 2023 ("Impugned Order") rejected the appeal as the pre-deposit of 10% of admitted tax amount was debited through the ECL.
Aggrieved by the Impugned Order the Petitioner filed a writ before the Hon'ble Orrisa High Court and contended that the CBIC vide circular dated July 06, 2022 clarified that payment of pre-deposit can be made by using the ECL.

Issue

Whether pre-deposit under GST can be done through E-Credit Ledger Instead of the ECL?

Held

The Hon'ble Orrisa High Court W.P (C) No.22817 of 2023 held as under:

Noted that, CBIC vide circular dated July 06, 2022 clarified that payment of pre-deposit can be made by using the ECL.
Opined that, the Petitioner has already made the pre-deposit using the ECL, that will now be accepted by the Revenue Department.
Set aside the Impugned Order, and listed the matter before the 1st Appellate Authority on September 11, 2023.

FAQ :

Yes, the Orissa High Court has confirmed that pre-deposit under GST can be made through the Electronic Credit Ledger (ECL).

The issue was whether an appeal rejection for not paying the pre-deposit in cash, when it was debited via the E-Credit Ledger, was valid.

A CBIC circular dated July 6, 2022, clarified that payments of pre-deposit can be made using the Electronic Credit Ledger.

The High Court set aside the rejection order, accepted the pre-deposit made through the ECL, and listed the matter before the 1st Appellate Authority.

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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