Finance Bill 2025 Proposes Amendment in S. 107 of GST Act: Reduces Pre-deposit In E-Way Bill Appeals From 25% To 10%
The hefty expenses of appeals cause many corporations to postpone them. A smaller pre-deposit could shorten the backlog in appellate authority and expedite the adjudication of disputes
On February 1, 2025, at 11:00 AM, Finance Minister Nirmala Sitharaman gave the Parliament a presentation of the Union Budget 2025. The GST Amendment to Section 107 of the GST Act has been proposed in the Finance Bill 2025. "Provided that in case of any order demanding a penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per...
On February 1, 2025, at 11:00 AM, Finance Minister Nirmala Sitharaman gave the Parliament a presentation of the Union Budget 2025. The GST Amendment to Section 107 of the GST Act has been proposed in the Finance Bill 2025. "Provided that in case of any order demanding a penalty without involving demand of any tax, no appeal shall be filed against such order unless a sum equal to ten per cent. of the said penalty has been paid by the appellant," according to the Central Goods and Services Act's section 107, sub-section (6), which replaces the original proviso.
In circumstances where there is only a penalty demand and no tax demand, Section 107(6) is being changed to require a 10% pre-deposit of the penalty amount for appeals before the Appellate Authority. Businesses that were subject to penalty-only lawsuits in the past had to make larger deposits in order to appeal. This modification lessens the financial burden and increases access to judicial action.
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Reducing the pre-deposit requirement to 10% of the penalty guarantees that firms won't have undue cash limitations throughout the appeal process because there is no tax demand involved. The amendment stops large financial deterrents from inhibiting legitimate appeals against incorrect fines by capping the pre-deposit. The hefty expenses of appeals cause many corporations to postpone them. A smaller pre-deposit could shorten the backlog in appellate authority and expedite the adjudication of disputes.
This modification lessens the cost of appealing GST-related disputes for firms, particularly MSMEs. A smaller pre-deposit guarantees that companies contending with tax requests won't experience undue financial strain. With the possibility to appeal, more taxpayers might be persuaded to follow GST regulations if the burden is lessened. The government is probably striking a balance between revenue collection and company convenience to prevent a rise in pointless appeals.
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