📢 Difficulty in Filing GST Appeals? GSTN Clarification

GSTN has recently highlighted an important practical issue being faced by taxpayers while filing appeals on the GST portal.

In certain cases, taxpayers are unable to file appeals against adjudication orders where the demand amount is reflected as “NIL”, even though a dispute regarding tax liability still exists.

This situation typically arises where:

Taxpayer has made voluntary payment (tax/interest/penalty) at the Show Cause Notice (SCN) stage
Such payment is made without accepting the liability
However, the adjudicating authority treats it as full discharge and issues an order showing NIL demand

⚙️ System Behaviour on GST Portal (DCR Mechanism)

When a demand order is passed:

A Demand ID is generated in the Demand and Collection Register (DCR) (Liability Ledger)
If the order reflects NIL demand, the system records zero liability

🚫 Issue Faced:

While filing appeal (Form APL-01):

GST portal throws error like:
“Disputed amount cannot be more than demand amount itself”
Since demand = NIL → system blocks appeal filing

👉 In simple terms:
No demand in system = No appeal allowed (technical restriction)

⚠️ Legal Position (Very Important)

GSTN has clarified the legal position:

✔ Payment at SCN stage ≠ Acceptance of liability
✔ Taxpayer still has right to appeal under Section 107 of CGST Act, 2017

📌 Key Insight:

Even if payment is made:

It may be for litigation avoidance / pressure / business reasons
It does not take away appeal rights

However, due to incorrect NIL demand recording, taxpayers are:
❌ Technically restricted from filing appeal
❌ Unable to exercise statutory rights

🛠️ Recommended Solution by GSTN

To resolve this issue, GSTN has advised the following:

✅ Step-by-Step Approach:

File Rectification Application
- Use GST portal rectification option
- Request correction in adjudication order
Approach Adjudicating Authority
- Highlight that:
  - Liability was not admitted
  - Demand should be properly determined and recorded
Obtain Rectification Order
- Revised order should reflect actual demand
File Appeal (APL-01)
- Once demand is updated
- Appeal can be filed within prescribed time limits