GST Appeal Process: First Appeal (Section 107), GSTAT Appeal (Section 112), Pre-Deposit and Filing Guide (2026)

Key Takeaways

• Any person aggrieved by a GST adjudicating authority's order can file a first appeal under Section 107 of the CGST Act in Form GST APL-01 within 3 months
• Pre-deposit for the first appeal is 10% of disputed tax (capped at Rs 20 crore each for CGST and SGST), effective 1 November 2024
• A further appeal to the GST Appellate Tribunal (GSTAT) under Section 112 requires an additional 10% pre-deposit (total 20%), filed in Form GST APL-05
• GSTAT became operational in February 2026, with 31 state benches across 45 locations; the backlog appeal deadline was extended to 31 July 2026
• For penalty-only orders from 1 October 2025 onward, a 10% pre-deposit on the penalty amount is mandatory before filing an appeal

GST Appeal Hierarchy: Four Levels of Challenge

When a GST officer passes an adverse order, whether confirming a demand under Section 73 or 74, rejecting a refund, or cancelling a registration, the taxpayer is not without recourse. The CGST Act provides a structured four-tier appeal mechanism.

Most disputes are resolved at the first or second level. This guide focuses on those two stages because they are the ones a business will file directly, with practical steps, forms, timelines, and worked examples.

Section 107: First Appeal to the Appellate Authority

Who Can Appeal

Any person aggrieved by any decision or order passed by an adjudicating authority can file an appeal. This includes orders on:

• Tax demands under Section 73 (non-fraud) or Section 74 (fraud, wilful misstatement, suppression)
• Refund rejection or partial sanction
• Registration cancellation
• Assessment orders under Section 62 (best judgment) or Section 63 (non-filers)
• ITC reversal orders
• Interest and penalty impositions

One important exclusion: orders passed by the Commissioner or Additional Commissioner as an adjudicating authority are not appealable under Section 107. Those go directly to the Appellate Tribunal under Section 112.

Time Limit

The appeal must be filed within 3 months from the date the order is communicated. The Appellate Authority can condone a delay of up to 1 additional month if sufficient cause is shown. No appeal can be admitted beyond these 4 months under any circumstances.

For departmental appeals under Section 107(2), the Commissioner can direct a subordinate officer to file an appeal within 6 months (plus 1 month condonation) in Form GST APL-03.

Pre-Deposit Requirements

Before the appeal is admitted, the appellant must pay:

1. The full amount of tax, interest, fine, fee, and penalty that is admitted (not in dispute)
2. A pre-deposit of 10% of the disputed tax amount

Before November 2024: The pre-deposit was 10% of disputed tax with a higher cap (Rs 25 crore each). Notification 20/2024 reduced the cap to Rs 20 crore effective 1 November 2024.

What the Appellate Authority Can Do

Under Section 107(11), the Appellate Authority can:

• Confirm the original order (dismiss your appeal)
• Modify the order (partially allow)
• Annul the order entirely (fully allow your appeal)
• Remand the matter back to the adjudicating authority for fresh adjudication

The Appellate Authority can also enhance the penalty or reduce the refund, but only after giving the appellant a reasonable opportunity to show cause against the proposed enhancement. This means an appeal can, in theory, make things worse, though this is uncommon.

How to File Form GST APL-01: Step-by-Step

Documents to Attach with APL-01

• A self-certified copy of the impugned order (DRC-07 or other order form)
• Statement of grounds of appeal with facts and legal arguments
• Pre-deposit payment challan
• Authorisation letter (if filed by an authorised representative)
• Supporting documents: invoices, GSTR returns, ITC ledger extracts, bank statements, contracts, correspondence with the department
• Relevant case law or circulars cited in the grounds

Withdrawal of Appeal

The appellant can request withdrawal of the appeal by filing an application. The Appellate Authority must decide on the withdrawal application within 7 days.

Worked Example: First Appeal Computation

A trader receives a DRC-07 under Section 73 confirming the following demand:

The trader admits Rs 6,00,000 of the tax (Rs 3,00,000 CGST + Rs 3,00,000 SGST) but disputes the remaining Rs 10,00,000 (Rs 5,00,000 CGST + Rs 5,00,000 SGST).

Before filing APL-01:

1. Pay admitted tax in full: Rs 6,00,000 (plus applicable interest on the admitted portion)
2. Pre-deposit on disputed tax: 10% of Rs 10,00,000 = Rs 1,00,000 (Rs 50,000 CGST + Rs 50,000 SGST)
3. Total upfront payment: Rs 7,00,000 (plus interest on admitted portion)

After filing: Recovery of the remaining Rs 9,00,000 disputed tax (plus interest and penalty on it) is automatically stayed until the Appellate Authority decides the appeal.

Section 112: Second Appeal to GSTAT

If the Appellate Authority's order is still unfavourable, the next level is the GST Appellate Tribunal (GSTAT), established under Section 109 of the CGST Act.

GSTAT: Now Operational

After years of delay since GST's launch in July 2017, GSTAT became operational in February 2026. The Tribunal comprises:

• Principal Bench in New Delhi (started 16 February 2026)
• 31 State Benches across 45 locations, each with 2 Judicial Members and 2 Technical Members (1 Centre + 1 State)

Key benches launched in 2026: Cuttack (February), Kolkata (March), Chennai (April), Agra (April), Hyderabad (April). More benches are progressively becoming operational.

Time Limit for GSTAT Appeal

The appeal must be filed within 3 months from the date the Appellate Authority's order is communicated. The Tribunal can condone a further delay of up to 3 months (total 6 months maximum) under Section 112(6).

Backlog deadline: For orders communicated before 1 May 2026, the Government initially set 30 June 2026 as the last date. Due to portal congestion (30,000 appeals filed in the final 15 days, peaking at 5,500 daily), the Ministry of Finance extended this to 31 July 2026. For orders communicated after 1 May 2026, the standard 3-month rule applies.

Pre-Deposit for GSTAT Appeal

An additional 10% of the disputed tax must be deposited (over and above the 10% paid at the first appeal stage). The total pre-deposit across both levels is therefore 20% of the disputed tax.

Filing Form GST APL-05

The second appeal is filed electronically in Form GST APL-05 through the GSTAT e-filing portal (gstat.gov.in). The form requires:

• Details of the first appellate order being challenged
• Grounds of appeal
• Proof of pre-deposit payment
• Supporting documents and case law
• Authorisation details (if filed through an authorised representative)

GST Appeal Forms: Quick Reference

Section 108: Revision by the Commissioner

Separate from the appeal process, Section 108 gives the Commissioner a suo motu power to revise any order passed by a subordinate officer if the order is erroneous in so far as it is prejudicial to the interest of revenue, or improper or illegal.

Key restrictions under Section 108(2):

• Revision cannot be exercised if the time limit for a departmental appeal under Section 107(2) has not yet expired
• Revision cannot be done if more than 3 years have elapsed from the date of the order
• Revision cannot be exercised if the order has already been appealed to the Appellate Tribunal

This power is relevant because a favourable first appellate order can sometimes be challenged by the Commissioner through revision, though in practice this is used sparingly.

Section 128A Amnesty: Alternative to Appeal for FY 2017-20 Demands

For demand orders under Section 73 (non-fraud cases) covering the period July 2017 to March 2020, there is an alternative to the appeal route: the amnesty scheme under Section 128A of the CGST Act.

Under this scheme, if the taxpayer pays the full tax demanded and withdraws any pending appeal, the interest and penalty are waived entirely. The scheme was introduced by the Finance Act 2024 (No. 2) and operationalised through Notification 20/2024.

Key conditions:

• Applies only to Section 73 demands (non-fraud), not Section 74
• Covers FY 2017-18, 2018-19, and 2019-20 only
• Full tax must be paid; interest and penalty are then waived
• Any pending appeal must be withdrawn before applying
• Application filed in Form SPL-01 (for notice-stage cases) or Form SPL-02 (for demand-order cases)
• Deadline for application: 30 June 2025 (this deadline has passed)

Businesses that missed the deadline must pursue the regular appeal route under Section 107 or 112.

Common Grounds for a GST Appeal

When drafting the grounds of appeal in APL-01 or APL-05, these are the categories that regularly succeed before appellate authorities:

1. Violation of natural justice: Show cause notice not served, personal hearing not granted, order passed without considering the reply
2. Incorrect computation of tax: Wrong rate applied, wrong classification (HSN/SAC code), computational errors in the demand
3. ITC wrongly denied: ITC reversed on procedural grounds when substantive conditions were met (supplier's GSTR-1 filed late but ITC reflected in GSTR-2B)
4. Limitation: Order passed beyond the time limit prescribed under Section 73(10) or 74(10)
5. Incorrect invocation of Section 74: Demand raised under Section 74 (fraud) when the case is at best a Section 73 (non-fraud) matter, which significantly changes the penalty
6. Factual errors: The officer relied on incorrect facts, ignored documentary evidence, or made assumptions without verification
7. Circular or notification not applied: A beneficial circular, notification, or exemption was available but not considered by the adjudicating officer

What Happens During the Appeal

After filing, the process follows a defined path:

First Appeal vs GSTAT Appeal: Key Differences

Practical Checklist for Filing a GST Appeal

• Confirm which section the demand is under (73 or 74) and whether Section 128A amnesty applies
• Note the exact date of communication and diarise the 3-month appeal deadline
• Separate admitted and disputed amounts; pay admitted tax via DRC-03
• Compute the 10% pre-deposit on disputed tax; pay through the portal
• Draft detailed grounds of appeal with supporting documents and case law
• File APL-01 on the GST portal before the deadline; download the APL-02 acknowledgement
• Submit certified copy of the order within 7 days if not available on the portal
• If the first appeal fails, file APL-05 with GSTAT within 3 months; pay the additional 10%
• Keep all payment challans, order copies, and portal screenshots for your records
• Never let the appeal window lapse: an uncontested order becomes enforceable, and recovery under Section 79 can freeze bank accounts