Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation.

Circular No.: 224/18/2024-GST
Date of Circular: 11th July 2024
Relevant Sections and Rules from CGST Act & Rules:

• Section 78 & 79: Recovery of tax
• Section 107 & 112: Appeal to Appellate Authority and Tribunal
• Section 168(1): Power to issue instructions
• Rule 142(2B): Adjustment of payments made via FORM GST DRC-03
• Forms: DRC-03, DRC-03A, DRC-05

Summary of Clarifications Provided:

1. Stay on Recovery Despite Non-Operational Appellate Tribunal:
   Where a taxpayer has received a first appellate order confirming demand, but cannot appeal due to non-constitution of the GST Appellate Tribunal, the recovery should be stayed if:

• The taxpayer pays the required pre-deposit (as per Section 112(8)), and
• Provides an undertaking to file the appeal once the Tribunal is operational.

Taxpayers can make pre-deposit by navigating through the GST portal:
Services > Ledgers > Payment towards demand, and selecting the relevant demand order.
This payment gets mapped against the demand and is adjusted once the appeal is filed.

2. Recovery Only If No Pre-deposit or Undertaking Is Given:
   If the taxpayer neither:

• Pays the required pre-deposit, nor
• Provides the undertaking,
  then recovery proceedings may be initiated under Section 78.

Even if undertaking is given and pre-deposit paid, but the taxpayer fails to file the appeal within timelines once the Tribunal starts functioning, recovery can still proceed.

3. Adjustment of Amounts Paid via DRC-03 Prior to DRC-03A Notification:

• Where a taxpayer inadvertently paid pre-deposit via FORM GST DRC-03, instead of using the “Payment towards demand” option, such payment can still be adjusted against the demand.
• The taxpayer must file FORM GST DRC-03A (newly introduced via Notification No. 12/2024-CT dated 10.07.2024).
• Upon filing, the date of payment via DRC-03 will be considered as valid for pre-deposit and stay will apply as per Sections 107(6) and 112(9).

4. Restriction – No DRC-03A If DRC-05 Already Issued:
   DRC-03A cannot be filed if an order in FORM GST DRC-05 (concluding proceedings under Rule 142(3)) has already been issued against the DRC-03 payment.
5. Interim Relief Till DRC-03A Functionality Is Live:
   If DRC-03A functionality is not yet available on the portal:

• Taxpayer may inform the jurisdictional officer, and
• Officer may withhold recovery until the functionality becomes operational.

Once live, the taxpayer must file DRC-03A promptly; otherwise, the officer may proceed to recover dues under Sections 78/79.

Source: Circular No.: 224/18/2024-GST