GSTN Advisory, Dated 03-04-2026
The Goods and Services Tax Network (GSTN) has issued a clarification regarding the right of taxpayers to contest liability and file an appeal under Section 107 of the Central Goods and Services Tax (CGST) Act, 2017, even where payment has been made at the Show Cause Notice (SCN) stage.
1. Right to Appeal Not Waived by Payment
GSTN has clarified that:
- Payment made during the SCN stage does not amount to admission of liability
- Taxpayers retain the statutory right to contest the demand and file an appeal under Section 107
2. Issue of NIL Demand in Adjudication Orders
In certain cases:
- The adjudication order incorrectly reflects a “NIL” demand
- This prevents taxpayers from filing an appeal on the GST portal, as the system does not recognise any demand
This creates a procedural limitation despite the existence of a dispute.
3. Remedy – Rectification by Adjudicating Authority
To address this issue, taxpayers are advised to:
- Approach the adjudicating authority
- Seek issuance of a rectification order reflecting the correct demand amount
4. Use of GST Portal for Rectification Requests
Where:
- A dispute exists but is not captured in the demand order, and
- Payment has been made prior to issuance of the order
Taxpayers may:
- File a rectification request through the GST portal using the available functionality
5. Filing of Appeal Post-Rectification
Once the rectification order is issued:
- The correct demand amount is reflected in the system
- The taxpayer can proceed to file an appeal on the GST portal
- The appeal must be filed within the prescribed statutory time limits
6. Conclusion
The clarification reinforces that payment at the SCN stage does not extinguish appellate rights, while also providing a practical procedural pathway to address system-related constraints through rectification, ensuring access to statutory remedies.
