Court order to receive working capital of GST appealing businesses
Recently, the Bench Division of the High Court of Orissa ruled that the pre-filing when filing an appeal under Article 107 (6) of the Central Product Tax Act 2017 and services (CGST Law) cannot be carried out by debiting the electronic credit. General ledger (ECRL). The pre-deposit payment must be made by debiting the electronic cash ledger (ECL) in accordance with article 49 (3) of the CGST law read with rule 85 (4) of the central rules of the product tax and services, 2017 (CGST rules).
This is because this ordinance requires taxpayers to pay the pre-filing amount (i.e. 10 percent of the disputed tax) in cash by transferring money from the Electronic Ledger (ECL) for any dispute. tax raised by them. This would mean more cash outflows, leaving little room for working capital requirements.
In the event that this went to the High Court of Orissa, the revenues raised GST claims as well as interest on the petitioners, who were engaged in the performance of the works contract. The claimant filed an appeal and made a pre-filing payment (i.e. 10 percent of the disputed fee) for the filing of an appeal, using the balance of the ECRL. The tax authorities dismissed the appeal and considered it to be defective, pointing out that the responsibility for the pre-deposit can only be discharged by debiting ECL.
The petitioner’s claim was that any output tax payment can be made through the ECRL. Since the pre-filing can be interpreted as a percentage of the output tax, it can be paid by debiting the ECRL.