Payment of Pre-deposit through Form GST DRC-03 not Valid for Service Tax / Excise Matters: CBIC

Payment of Pre-deposit through Form GST DRC-03 not Valid for Service Tax / Excise Matters: CBIC

In the case ofSodexo India Services Pvt. Ltd vs The Union of India and Ors [Writ Petition No.6220/2022], Bombay High Court rejected the appeal for non-compliance of the pre deposit requirements as mandated Central Excise Act and Finance Act, where such payments have been made through Form DRC-03 on common GST portal.

The Central Board of Indirect Tax and Customs (CBIC) has issued instructions regarding pre-deposit of payment method for cases pertaining to Central Excise and Service Tax, to all Chief & Principal Commissioners of CGST and the Principal Director-General that, payments through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposits under Section 35F of the Central Excise Act, 1944 read with the Section 83 of the Finance Act, 1944. It has been clarified in the instruction that Form GST DRC-03 is prescribed for the payment of tax, interest, penalty or any other payment due under the Central Goods and Services Tax Act, 2017. In connection with the appeal mechanism in the GST regime, Form GST APL-01 given under the CGST Rules, 2017 provides for filing an appeal with the option of payment of admitted amount and pre-deposit through electronic cash/credit ledger.

Accordingly, it was added that the Form GST DRC-03 is not a prescribed mode for payment of pre-deposit. Observing from the provisions of the Central Goods & Services Tax Act, 2017, that, any credit, tax, interest, fine or penalty recoverable on or after 01-07-2017 under Central Excise Act and Finance Act, shall be recovered as an arrear of tax under the CGST Act.

It was also observed to be settled that pre-deposit as a requirement for exercising the right to appeal is neither a duty nor can be treated as an arrear under the said Central Excise or Finance Acts.  It thus clarified that payments through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposits under the Central Excise Act &Finance Act. It was also added that the dedicated CBIC_GST Integrated Portal – http://cbic-gst.gov.in shall be utilised for making the pre-deposits.