Chandrasekhar Kutty, Founding Partner, Sashthi Taxlegal Advisory Services LLP | GST Litigation • Advisory • Appellate Representation | Hosur • Bengaluru
27 October 2026
CBIC has removed several recurring friction points on pre-deposit for GST appeals, both at the time of filing before the Appellate Authority or the Appellate Tribunal and at the time of getting the pre-deposit back.
- Admitted amount versus tax in dispute. The taxpayer decides at the time of filing which part of the demand is admitted (to be paid in full) and which is disputed (10% pre-deposit). The split is recorded in Table 14 of APL-01 and Table 20 of APL-05.
- Pre-deposit before GSTAT. The 10% is computed on the tax in dispute as confirmed by the Appellate Authority, not on the original order-in-original demand. Where the first appeal reduced the demand, the second-stage pre-deposit falls correspondingly.
- No express refund direction needed. An appellate order in the taxpayer’s favour need not say that the pre-deposit is to be refunded. The claim is filed in RFD-01 under serial 7, “on account of order”.
- Department’s intended appeal is no bar. Refund of pre-deposit cannot be withheld because the department intends to or has filed a further appeal, unless the order is stayed by the Tribunal or a Court.
- Interest under section 115. Where pre-deposit was made at both the first appeal and Tribunal stages, interest runs separately from each actual date of payment.
- Remand. On full remand by the Tribunal, the pre-deposit is refundable within the prescribed time. On partial remand, the confirmed portion is adjusted against the pre-deposit with interest before the balance is released.
Practice point
The clarifications on the GSTAT pre-deposit base and on refund despite a pending departmental appeal are the two most useful for appellants. Where refund of pre-deposit has been withheld on the ground that the department “proposes to file an appeal”, a fresh representation citing this circular should be filed, with interest under section 115 claimed from the date of each payment.
What appellants should do now
- Recompute the GSTAT pre-deposit on the amount confirmed in first appeal before filing APL-05.
- File RFD-01 under “on account of order” for every favourable appellate order without waiting for the department.
- Where refund has been withheld pending a departmental appeal, send a representation citing Circular 259/05/2026-GST and claim section 115 interest.
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For advice on how this circular affects your business or a pending dispute, write to contact@sashthitaxlegal.com or call +91 99521 84110.
Source: CBIC Circular No. 259/05/2026-GST dated 26.10.2026, F. No. CBIC-20001/2/2026-GST. This article is for general information and does not constitute professional advice. Readers should obtain specific advice before acting on any matter discussed here.