The 55th Goods and Services Tax ( GST ) Council meeting, held on December 21, 2024, in Jaisalmer, Rajasthan, proposed a significant amendment to Sections 107 and 112 of the Central Goods and Services Tax ( CGST ) Act, 2017 as a measure of simplifying the filing process of appeals involving only disputes pertaining to the penalty amount.
Convening the press meet that began at 6:38 P.M. IST, Finance Minister Nirmala Sitharaman shed light on the proposal for reducing the pre-deposit amounts on penalties. The Council Meeting was also attended by notable dignitaries, including Union Minister of State for Finance Shri Pankaj Chaudhary and other state-level leaders.
Press release issued on the ‘Recommendations of the 55th Meeting of the GST Council’ provides for the amendment to the proviso to Section 107(6) of the CGST Act, 2017 which presently levies a pre-deposit fee of 25% for filing appeal before the Appellate Authority. The proposed amendment seeks to reduce the pre-deposit fee from 25% to 10% of the penalty amount, specifically in cases involving only demand of penalty and no demand of tax.
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Similarly, another recommendation was made, calling for the introduction of a new proviso to Section 112(8) of the CGST Act, 2018 permitting the payment of pre-deposit at 10% for instituting appeals before the Appellate Tribunal in cases involving demand of penalty only, and no dispute on the basis of tax.
The amendment has been crafted in a manner so as to not prejudice taxpayers and the government since penalties do not directly cause revenue loss to the government, unlike the loss caused by unpaid taxes. Lowering the percentage of statutory penalty would promote easier access to means of justice for aggrieved individuals.
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