GST appeal pre-deposit: Circular No. 259/05/2026-GST on the admitted amount, the Tribunal stage and refunds

CBIC has issued Circular No. 259/05/2026-GST dated 26 October 2026, under section 168(1) of the Central Goods and Services Tax Act, 2017 (CGST Act), on the deposit an appellant must make before an appeal is admitted. The Board records that representations from trade and industry pointed to varying interpretations by field formations, and that the inconsistency had led to more litigation. The circular answers six questions: what is admitted and what is in dispute, how the Tribunal-stage deposit is worked out, and four questions on refund. It prescribes no new form or date. It settles how the existing provisions are to be read.

The statutory requirement

Section 107(6) sets two conditions for a first appeal: whatever part of the order’s tax, interest, fine, fee and penalty the appellant accepts is paid in full, and 10% of the tax still contested is deposited. Section 112(8) repeats both conditions for the Appellate Tribunal, and makes the Tribunal deposit an additional one, over and above what went in at the first stage.

The disputes the circular addresses arise from that structure. The admitted part is paid in full and the disputed part at 10%, so the line between them decides the cash an appellant has to find before the appeal is even admitted.

What is admitted and what is disputed

In the Board’s definition, the admitted amount is whatever part of the order’s demand (tax, interest, fine, fee and penalty alike) the taxpayer accepts as payable and leaves out of the appeal. It must be paid in full before the appeal is filed. The contested balance is the tax in dispute, and only that disputed tax carries the 10% deposit.

The more useful sentence is the last one in the Board’s answer: it is the taxpayer who decides, when filing, which amounts are admitted and which are contested, and that choice is recorded in Table-14 of FORM GST APL-01 and Table 20 of FORM GST APL-05. On that reading, the split is the appellant’s to make, not the officer’s.

Two points follow. The 10% is a percentage of tax only. Interest, fine, fee and penalty enter the computation only to the extent they are admitted. And because whatever is shown as admitted must be paid in full, the tables in APL-01 and APL-05 deserve the same care as the grounds of appeal. An amount shown as admitted is, by definition, one the taxpayer is not challenging.

The Tribunal stage

The second question is the base for the Tribunal deposit where the Appellate Authority has modified the demand. The circular’s answer is that the 10% under section 112(8) is computed with reference to the liability confirmed by the Appellate Authority that the appellant still disputes. The original demand is not the base.

To illustrate with round figures: if an order confirmed tax of ₹50 lakh and the Appellate Authority reduced it to ₹30 lakh, an appellant disputing the whole ₹30 lakh before the Tribunal pays 10% of ₹30 lakh, not of ₹50 lakh. That sum comes on top of the first-stage deposit, as section 112(8) itself states.

Before the appeal to the Tribunal is filed, the deposit should be recomputed from the first appellate order, not carried forward from the original demand.

Refund without a direction in the order

The third question is whether the appellate order must state that the pre-deposit is to be refunded. The Board’s answer is that it need not. Where the order requires the amount paid under section 107(6) or section 112(8) to be refunded, no explicit mention is required. On receiving the order, the appellant files the refund claim under S. No. 7 of FORM GST RFD-01, “on account of order”.

A favourable order that is silent on the pre-deposit is therefore not a reason to go back to the Appellate Authority for a clarification. The RFD-01 claim can be filed on the order as it stands.

The Department’s appeal is no ground to refuse

The fourth answer will matter most in practice. Once the Appellate Authority or the Tribunal rules for the appellant and a refund application is made, the deposit is owed back. If the Department contemplates an appeal against a favourable order of the Appellate Authority, the refund is still payable unless that order is stayed by the Appellate Tribunal or a Court. The Board’s conclusion is stated plainly:

refund of the pre-deposit amount should not be denied merely on the ground that the Department intends to or has filed an appeal against the order of the Appellate Authority.

This is where field practice and the law had parted. A refund application held back because the Department is considering an appeal, or has filed one, now runs against the Board’s own clarification. The only ground the circular recognises for holding the refund back is a stay. An appellant facing such an objection should cite issue 4 of the circular in the reply.

Interest from each date of deposit

Under section 115, an amount that has to be refunded carries interest running from when it was paid. The circular notes that the pre-deposit is paid separately at each stage, so where an appellant deposited at both stages, interest on each deposit runs from the day that deposit was actually made. The two are not pooled under one date.

The interest claim on a refund after a favourable Tribunal order should therefore show two dates, one for each deposit, rather than one date for the total. The challan dates for both stages need to be kept with the appeal file.

Remand by the Tribunal

The last question concerns a Tribunal order sending the case back. When the matter goes back to the adjudicating authority, the deposit becomes refundable, and the refund is to issue within the time the law allows.

A partial remand is treated differently. If the Tribunal sustains part of the demand, that sustained part and the interest on it are first set off against the deposit or otherwise collected. The appellant receives what is left.

On a partial remand, the appellant should work out the confirmed portion and its interest before filing the claim, so that the amount claimed is the balance the circular allows.

This article is intended for educational purposes only and should not be construed as professional advice. It is based on the law as understood on the date of publication; laws and regulations are subject to change, and it may not reflect later developments. Readers are advised to consult a qualified tax professional on their specific situation before taking any action based on it. CA. Mohit Gaba takes no responsibility for any action taken or decision made on the basis of this article.