GSTN Advisory: Taxpayers Unable to File Appeals in ‘NIL Demand’ Cases Due to System Constraints on Portal
GSTN has issued an advisory stating that taxpayers are unable to file appeals on the GST portal in cases where demand is shown as “NIL” due to system constraints.
The GST Network (GSTN) has recently issued an advisory pointing out a technical issue being faced by taxpayers while filing appeals on the GST portal. This issue mainly arises in cases where the demand order passed by the tax officer shows “NIL” demand, even though there is still a dispute regarding the tax liability.
As per the advisory, this problem usually happens when a taxpayer makes payment of tax, interest or penalty during the stage of Show Cause Notice (SCN). In many cases, such payments are made voluntarily to avoid further litigation or penalty, but it does not mean that the taxpayer is accepting the liability.
However, later when the adjudicating authority passes the final order, it sometimes treats this payment as full discharge of the demand without clearly determining the actual liability. Because of this, the order reflects a “NIL” demand.
Due to this NIL demand, the GST portal automatically records zero liability in the Demand and Collection Register (DCR). When the taxpayer tries to file an appeal using Form APL-01, the system does not allow it. It may show an error message stating that the disputed amount cannot be more than the demand amount itself. Since the demand is shown as zero, the system blocks the appeal filing completely.
GSTN has clarified that payment made during the SCN stage without admission of liability does not mean that the taxpayer has accepted the demand. The taxpayer still has the legal right to challenge the liability and file an appeal under Section 107 of the CGST Act. But due to this technical limitation in the portal, taxpayers are not able to exercise this right properly.
To address this issue, GSTN has suggested an alternative solution. Taxpayers are advised to approach the adjudicating authority and request for a rectification order. This rectification order should correctly mention the actual demand amount instead of showing NIL. The request for rectification can be filed through the option available on the GST portal.
Once the rectification is done and the correct demand is reflected in the system, the taxpayer can then proceed to file the appeal within the prescribed time limit. This advisory is important because many taxpayers were facing confusion and difficulty due to this system issue, and were unable to move forward with their appeals.
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