Compliance
Filing a GST appeal under Section 107 costs you up to three months (plus a possible extra month for sufficient cause) from the communication of the order, a pre‑deposit of the admitted tax, interest, fine and penalty plus 10% of the disputed tax, and it automatically stays recovery of the balance, affecting cash flow and compliance timelines.
Check your DPDP readiness — free More on the blogAn appeal to the Appellate Authority must be filed within three months from the date the order is communicated to the taxpayer. The statute does not count from the order’s issuance date, but from when the taxpayer actually receives it. If the appellant can demonstrate sufficient cause, the Authority may, at its discretion, grant a further month. Beyond this period the order becomes final and enforceable, so timing is critical for preserving rights.
No appeal is admitted unless the appellant pays, in full, the portion of tax, interest, fine, fee and penalty that it admits, together with an additional 10 % of the remaining tax in dispute. This amount is capped at ₹20 crore under the CGST Act. From 1 October 2025, if the order demands only a penalty, the 10 % is calculated on that penalty alone. The pre‑deposit must be shown through proof of payment when filing Form GST APL‑01.
Once the pre‑deposit is paid, Section 107(7) deems that recovery actions for the balance of the demand are stayed. This means the tax authority cannot continue to attach assets or garnish bank accounts for the undisputed portion while the appeal is pending. The stay applies automatically; no separate application is needed, but the pre‑deposit must be correctly documented. The stay of recovery provides immediate cash‑flow relief, allowing the business to continue operations without the pressure of enforcement actions. However, the appellant remains liable for the pre‑deposit amount, which must be paid regardless of the final outcome of the appeal.
The Appellate Authority is required to grant a hearing and may adjourn the case no more than three times for any party. It can admit new grounds of appeal if their exclusion was not wilful. The Authority must deliver its order—confirming, modifying or annulling the original decision—within one year of the appeal filing. No remand to the lower adjudicating authority is permitted. If the Authority fails to decide within the stipulated year, the appellant may consider invoking higher judicial review, but the primary remedy lies in ensuring the hearing proceeds promptly and that all procedural requirements, especially the pre‑deposit, are satisfied.
Businesses often miscalculate the three‑month window by starting from the order’s issuance date rather than its communication date, leading to missed deadlines. Filing an appeal without the required pre‑deposit results in the appeal being rejected outright. Paying the entire demand instead of just the pre‑deposit does not provide any additional benefit, as the stay of recovery is triggered solely by the pre‑deposit. Lastly, relying on the discretionary extra month without a convincing cause can cause the appeal to be dismissed. To mitigate these risks, maintain a clear record of when orders are communicated, verify the exact amount of tax admitted, calculate the 10 % correctly, and ensure the pre‑deposit is paid before submitting the appeal form. Promptly request the extra month only when genuine cause exists and be prepared to substantiate it.
You have three months from the date the order is communicated to you. The Appellate Authority may grant an additional month if you show sufficient cause, but this is discretionary and not automatic.
You must pay the full amount of tax, interest, fine, fee and penalty you admit, plus 10 % of the remaining disputed tax. The total pre‑deposit is capped at ₹20 crore, and for penalty‑only orders after 1 Oct 2025, the 10 % is calculated on the penalty.
Yes. Once the pre‑deposit is paid, recovery proceedings for the balance are deemed stayed under Section 107(7). This stay operates automatically without any further application.
No. The Authority can only confirm, modify or annul the original order. It does not have the power to remand the case back to the adjudicating authority.
Published 1 November 2026. Founder & CEO at VidhiSar. I have watched four companies pay for the same mistake, and it was never the mistake anyone expected. VidhiSar is software, not a law firm: every answer names the section it relies on so you can check it, and anything turning on your specific facts is worth putting to a professional. More about who builds this
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