Orissa HC rules deposits for GST appeals must be filed via cash ledger only
The Orissa High Cour has ruled that deposits required to be submitted for appealing in a dispute under the goods and services tax (GST) have to be paid through cash ledger only. Experts say this could impact those businesses which have huge input tax credit lying unused.
The order was announced in a case where the petitioner said that he had paid these deposits, called pre-deposits in technical jargon, through an electronic credit ledger and even then additional commissioner of sales tax (appeal) rejected his appeal.
The court said it is unable to find any error having been committed by the appellate authority in rejecting the petitioner's contention that the electronic credit ledger could be debited for the purpose of making the payment of pre-deposit.
Rajat Mohan, senior partner AMRG & Associates, said the ruling will have a negative impact on businesses having a huge chunk of accumulated tax credit such as start-ups and the companies in the textile sector.
He said in business language authorities will not
differentiate between the balance lying in electronic cash and credit ledger as both are meant to be utilized for payment of output taxes.
Under the GST laws, an appellant has to pay ten percent of the amount of tax in dispute as a pre-deposit. For the next appeal, an additional 20 percent has to be paid.
