The Goods and Services Tax Network (GSTN) has recently issued an advisory to address the issue regarding difficulty in filing appeals against adjudication orders showing NIL demand due to prior voluntary payment. The key aspects of the advisory are summarized hereinbelow:

• Certain taxpayers are facing difficulty in filing appeals on the GST portal where adjudication orders reflect “NIL” demand, despite an existing dispute on tax liability
• This issue typically arises where payments (tax/ interest/ penalty) in full or partial are made at the Show Cause Notice (SCN) stage without admission of liability, and the adjudicating authority issues an order treating such payment as full discharge without determining liability
• In such cases, the GST portal generates a zero-value Demand ID in the Demand and Collection Register (DCR) known as the liability ledger
• The system restricts filing of appeal (Form APL-01) against such order and may display an error “Disputed amount cannot be more than demand amount itself.”
• As no liability is reported by the tax officer on GST portal, the appeal filing functionality is blocked
• It is clarified that:
  1. Payment at the SCN stage without admission does not amount to acceptance of liability
  2. Taxpayers retain the right to file appeal under Section 107 of the CGST Act, 2017
     
     However, due to NIL demand reflected in the order/system, taxpayers are unable to exercise this statutory right

• In view of the foregoing issue, the taxpayers should approach the adjudicating authority for issuance of a rectification order
• Such rectification requests may be filed through the GST portal
• Upon correction and reflection of actual demand, the taxpayer may proceed to file an appeal on GST portal within prescribed timelines