GST Appeal Against Demand Order in India: Sections 73, 74, 74A and 107 Guide

A GST demand order can create liability for tax, interest, penalty or wrongly availed input tax credit. However, receipt of an adverse GST order does not necessarily mean that the taxpayer must accept the entire demand. Where the adjudicating authority has incorrectly interpreted facts, ignored reconciliations, exceeded the show cause notice, applied an incorrect legal provision or otherwise passed an appealable order, the taxpayer may challenge it before the appropriate Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017.

Quick Answer: A taxpayer aggrieved by an appealable GST decision or order can generally file a first appeal under Section 107 within three months from the date on which the decision or order is communicated. Subject to sufficient cause, the Appellate Authority may allow a further period of one month. The taxpayer is generally required to pay admitted dues and a pre-deposit equal to 10% of the remaining disputed tax, subject to the statutory ceiling. The appeal is filed in FORM GST APL-01.

The applicable demand provision also depends upon the financial year. Sections 73 and 74 apply to specified demand proceedings up to FY 2023-24, while Section 74A applies to relevant demand proceedings from FY 2024-25 onward.

If your matter is still at the notice stage rather than the final demand-order stage, read our detailed guide on GST Notice Reply for ASMT-10, DRC-01A and DRC-01. Businesses requiring professional representation can also refer to our GST Assessment and Litigation Services in India.

What Is a GST Demand Order?

Meaning of a GST demand order

A GST demand order is an adjudication order determining an amount payable by a taxpayer under the GST law. Depending upon the proceeding, it may involve tax not paid or short paid, an erroneous refund, input tax credit allegedly wrongly availed or utilised, interest, penalty or other amounts.

A demand order normally follows statutory proceedings in which the taxpayer has been given an opportunity to respond to the allegations raised by the proper officer.

Demand order is different from a show cause notice

A show cause notice contains allegations and proposes a liability. A demand order is passed after consideration of the notice, taxpayer’s response, supporting documents and hearing, where applicable.

Accordingly, a taxpayer should not confuse a DRC-01 summary of a show cause notice with a DRC-07 summary of an adjudication order.

DRC-07 is a summary, not a substitute for the complete order

FORM GST DRC-07 reflects the summary of the order and the amount determined as payable. For deciding whether an appeal should be filed, the taxpayer should obtain and examine the complete adjudication order, including the reasoning adopted by the proper officer.

Merely reviewing the liability displayed on the GST Portal may not reveal the full legal and factual basis of the demand.

Which GST Demand Provision Applies to Your Case?

Before analysing an appeal, identify the statutory provision under which the demand has been determined.

Provision	Period	Broad Scope
Section 73	Up to FY 2023-24	Non-fraud cases involving tax short-payment, erroneous refund or wrongful ITC
Section 74	Up to FY 2023-24	Cases involving fraud, wilful misstatement or suppression of facts to evade tax
Section 74A	FY 2024-25 onward	Common determination framework with different penalty consequences depending on the nature of default

Section 73 demand orders

Section 73 applies to specified determination proceedings pertaining to periods up to FY 2023-24 where the alleged tax short-payment, erroneous refund or wrongful input tax credit does not arise from fraud, wilful misstatement or suppression of facts to evade tax.

Section 74 demand orders

Section 74 applies to relevant periods up to FY 2023-24 where fraud, wilful misstatement or suppression of facts to evade tax is alleged.

Where such an allegation has been made without sufficient factual basis, it may become an important issue in the adjudication as well as appellate proceedings.

Section 74A for FY 2024-25 onward

For FY 2024-25 onward, Section 74A provides the principal determination framework for tax not paid or short paid, erroneous refund and input tax credit wrongly availed or utilised.

Although Section 74A contains a common determination framework, the penalty consequences continue to differ depending upon whether the matter involves fraud, wilful misstatement or suppression of facts to evade tax.

The current legislation may be checked through the official India Code database.

How Does a GST Demand Proceeding Reach the Appeal Stage?

Show cause notice and taxpayer reply

Before a demand is adjudicated, the taxpayer is generally served with the applicable show cause notice or communication setting out the allegations and proposed liability.

The reply should address the allegations through reconciliations, supporting documents and legal submissions. Our separate GST Notice Reply Guide explains ASMT-10, DRC-01A, DRC-01 and DRC-06 proceedings in detail.

Personal hearing before adjudication

Where requested in writing or where an adverse decision is contemplated in circumstances covered by Section 75, an opportunity of hearing is relevant to the adjudication process.

The taxpayer should preserve the written submissions, hearing records and additional evidence placed before the adjudicating authority because these may later become important in appeal.

Passing of the adjudication order

After considering the material on record, the proper officer passes the adjudication order determining the liability.

The order should be analysed immediately because the statutory limitation for filing an appeal is linked to communication of the decision or order.

What Should You Check Immediately After Receiving a GST Demand Order?

Record the date of communication

The date on which the order is communicated is critical because the normal three-month appeal limitation under Section 107 is calculated from the date of communication of the decision or order.

Keep the portal communication, email, electronic acknowledgement and downloaded order securely on record.

Compare the order with the show cause notice

Compare the final findings with the allegations originally raised in the show cause notice.

Check whether the adjudicating authority has confirmed the same grounds and amounts, introduced a new factual basis, changed the classification of the dispute or travelled beyond the scope of the allegations communicated to the taxpayer.

Compare the order with your reply and evidence

Prepare an issue-wise comparison of:

• allegation in the show cause notice;
• taxpayer’s reply;
• supporting evidence submitted;
• finding in the adjudication order; and
• final amount confirmed.

This exercise often reveals whether a material reconciliation, invoice, contract, judicial precedent or legal argument has not been properly considered.

Can a GST Demand Order Be Rectified Instead of Appealed?

Rectification under Section 161

Section 161 provides a mechanism for rectification of an error apparent on the face of the record in a decision, order, notice, certificate or other document.

An affected person may bring such an apparent error to the notice of the authority within the statutory period prescribed under Section 161.

Examples of apparent errors

Depending upon the facts, rectification may be relevant where there is an obvious clerical error, arithmetical mistake, incorrect recording of a figure or another error that is apparent from the existing record.

A rectification application should clearly distinguish an apparent mistake from a substantive disagreement requiring appellate examination.

Rectification should not be used to miss the appeal deadline

A taxpayer should not assume that filing a rectification application automatically extends the statutory time for filing an appeal.

Where substantive findings are disputed, the appeal limitation should be monitored independently and professional advice should be obtained on whether rectification, appeal or both need to be considered.

First Appeal under Section 107 of the CGST Act

Who can file an appeal under Section 107?

Any person aggrieved by an appealable decision or order passed by an adjudicating authority under the CGST Act, SGST Act or UTGST Act may file an appeal before the prescribed Appellate Authority, subject to the statutory conditions.

Which GST orders may generally be appealed?

Appealable matters can include adjudication orders involving tax demand, input tax credit, refund, penalty, registration and other decisions passed by adjudicating authorities, subject to the provisions of the GST law.

The exact appellate forum should be determined from the designation of the officer who passed the order and the applicable jurisdictional notification.

Are all GST orders appealable?

No. Section 121 specifies certain non-appealable decisions and orders, including specified orders concerning transfer of proceedings, seizure or retention of books and records, sanction for prosecution and orders under Section 80.

Therefore, the nature of the impugned decision should be verified before preparing FORM GST APL-01.

What Is the Time Limit for Filing a GST Appeal?

Normal three-month limitation

Under Section 107(1), an appeal by a taxpayer is generally required to be filed within three months from the date on which the decision or order is communicated to the person.

This makes the date of communication more important than the date printed on the order in many practical situations.

Additional one-month condonation period

Section 107(4) permits the Appellate Authority to allow an appeal within a further period of one month where it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the normal period.

A delayed appeal should therefore be accompanied by a properly supported application explaining the sufficient cause for delay.

Do not treat four months as the normal appeal period

The normal limitation is three months. The additional month is a condonable period and should not be treated as an automatic extension.

As soon as an adverse order is received, the appeal file should be opened and the final filing date calculated immediately.

Pre-Deposit Required for GST Appeal under Section 107

Admitted liability must be paid

Before filing an appeal, the appellant is required to pay in full the portion of tax, interest, fine, fee and penalty arising from the impugned order which is admitted by the appellant.

The admitted and disputed components should therefore be carefully identified while preparing the appeal.

10% pre-deposit on disputed tax

For the disputed portion, Section 107 presently requires a pre-deposit equal to 10% of the remaining amount of tax in dispute, subject to the statutory maximum of ₹20 crore.

The calculation should be based on the tax component in dispute and the exact statutory conditions applicable to the particular order.

Penalty-only orders

Under the present Section 107 framework, where an order demands penalty without involving any demand of tax, an appeal cannot be filed unless 10% of the penalty is paid as the prescribed pre-deposit.

This provision is particularly relevant for taxpayers challenging stand-alone penalty orders.

Effect of pre-deposit on recovery

Where the amount required under Section 107(6) has been paid, recovery proceedings for the balance amount are deemed to be stayed in accordance with Section 107(7).

This statutory stay is an important practical consequence of properly instituting the appeal.

How to File GST Appeal in FORM GST APL-01

Appeal is filed through FORM GST APL-01

A taxpayer’s first appeal under Section 107 is filed in FORM GST APL-01 with the relevant appeal particulars, statement of facts, grounds of appeal, disputed amounts and prayer for relief.

The filing process is undertaken through the prescribed electronic mechanism available on the GST Common Portal.

Order already uploaded on the GST Portal

Where the decision or order appealed against is uploaded on the common portal, the current Rule 108 framework provides for issuance of the final acknowledgement in FORM GST APL-02 and treats the date of provisional acknowledgement as the filing date, subject to the applicable procedural requirements.

Where the order is not uploaded on the portal

Where the decision or order appealed against is not uploaded on the common portal, the appellant should comply with the current requirement relating to submission of a self-certified copy of the decision or order within the prescribed period.

Failure to complete the procedural requirement within time may affect the date treated as the date of filing. Accordingly, filing should not be regarded as complete merely because the initial electronic form has been submitted.

How to Draft Statement of Facts and Grounds of Appeal

Prepare a concise statement of facts

The statement of facts should explain the relevant background chronologically without mixing factual narration with every legal argument.

It should ordinarily cover the business activity, relevant tax period, return position, notice proceedings, submissions made, hearing and final adjudication.

Draft separate and specific grounds of appeal

Grounds of appeal should challenge the specific findings of the adjudicating authority.

Depending upon the case, grounds may deal with:

• incorrect appreciation of facts;
• incorrect tax computation;
• wrongful denial of input tax credit;
• incorrect classification or tax rate;
• turnover reconciliation;
• reverse charge liability;
• limitation;
• jurisdiction;
• principles of natural justice;
• unsupported allegation of suppression or fraud;
• failure to consider evidence; or
• incorrect imposition of penalty.

Use legal grounds as well as factual grounds

A strong GST appeal should not simply repeat the reply filed before the adjudicating authority. It should identify exactly why the findings in the final order are factually or legally unsustainable.

The appeal may rely on the CGST Act, applicable rules, notifications, circulars and relevant judicial precedents depending upon the dispute.

Draft a precise prayer

The prayer should clearly state the relief sought, such as annulment or modification of the impugned demand, deletion of penalty, allowance of input tax credit or grant of any other legally available relief.

Documents Required for GST Demand Appeal

Basic appeal documents

The exact documentation depends upon the case, but a GST appeal file commonly includes:

• complete adjudication order;
• DRC-07 summary, where applicable;
• show cause notice and DRC-01;
• reply filed against the notice;
• DRC-06 acknowledgement, where applicable;
• personal hearing submissions;
• relevant GST returns;
• pre-deposit evidence;
• statement of facts;
• grounds of appeal; and
• supporting annexures.

Reconciliation and accounting evidence

For turnover or input tax credit disputes, prepare reconciliations linking books of account with GSTR-1, GSTR-3B, GSTR-2B, annual returns, ledgers and financial statements.

Taxpayers should also maintain appropriate accounts and records under GST to support positions taken during assessment and appeal.

Transaction-specific evidence

Depending upon the issue, annexures may include invoices, debit notes, credit notes, purchase orders, contracts, e-way bills, bills of entry, shipping bills, LUT documents, bank statements and evidence of receipt of goods or services.

Refund disputes may additionally require the underlying refund application and supporting documentation. Refer to our GST Refund Services for related assistance.

Can Additional Evidence Be Filed in GST Appeal?

Appeal is not an unrestricted second opportunity to create evidence

The appellant should ideally place all relevant evidence before the adjudicating authority during the original proceedings.

Appellate proceedings should therefore be prepared on the basis of a complete record wherever possible.

Additional evidence may require justification

The GST Rules contain conditions governing production of additional evidence before the Appellate Authority or Appellate Tribunal.

Where evidence could not reasonably be produced earlier, the appellant should explain the circumstances and satisfy the applicable statutory requirements rather than merely attaching new documents without explanation.

Build the evidence file at the notice stage

This is one reason professional handling of the original notice is important. A properly prepared GST notice reply helps create a clear documentary record for subsequent adjudication and appeal.

Personal Hearing Before the GST Appellate Authority

Opportunity of hearing under Section 107

Section 107 requires the Appellate Authority to provide the appellant an opportunity of being heard.

The appellant should use the hearing to explain the principal factual and legal issues rather than merely repeating every paragraph of the written appeal.

Prepare written submissions for the hearing

For significant GST disputes, prepare a short written hearing note covering:

• background of the dispute;
• principal grounds;
• key reconciliations;
• relevant statutory provisions;
• important supporting evidence;
• judicial precedents relied upon; and
• specific relief requested.

Adjournments should not be assumed to be unlimited

Section 107 provides for adjournment where sufficient cause is shown and reasons are recorded. It also restricts the number of adjournments that may be granted to a party during the hearing.

Accordingly, the appeal should be prepared for effective hearing from the beginning rather than depending upon repeated adjournments.

What Powers Does the GST Appellate Authority Have?

Appeal can be confirmed, modified or annulled

After making such further inquiry as may be necessary, the Appellate Authority may pass an order confirming, modifying or annulling the decision or order appealed against.

First Appellate Authority cannot simply remand the case

Section 107 specifically provides that the Appellate Authority shall not refer the case back to the adjudicating authority that passed the original decision or order.

The appellate order should therefore determine the issues before it in accordance with the statutory framework.

Enhancement requires opportunity to respond

Where the Appellate Authority proposes specified adverse enhancement, reduction of refund or input tax credit, or determination of additional tax liability, the taxpayer must be given the opportunity contemplated under Section 107 before such an adverse order is passed.

Appellate order must contain reasons

The order disposing of the appeal is required to be in writing and state the points for determination, the decision and the reasons for the decision.

Section 107 also states that, where possible, the Appellate Authority should hear and decide an appeal within one year from the date of filing, subject to statutory exclusions.

Recovery of GST Demand During and After Appeal

General recovery period after service of order

Section 78 generally provides a period before recovery proceedings are initiated for an amount payable pursuant to an order, subject to the statutory power to require payment within a shorter period for recorded reasons in appropriate cases.

Taxpayers should therefore not wait for recovery action before deciding whether the order needs to be challenged.

Statutory stay after Section 107 pre-deposit

Once the statutory payment required for filing the first appeal is made in accordance with Section 107(6), recovery proceedings for the balance amount are deemed to be stayed under Section 107(7).

Monitor the electronic liability ledger

After filing an appeal and making the prescribed pre-deposit, taxpayers should retain all acknowledgements and monitor the GST portal to ensure that the disputed demand and recovery status are appropriately reflected.

Any mismatch should be addressed promptly with the relevant jurisdictional authority.

Common Grounds for Challenging a GST Demand Order

Failure to consider reconciliation

A demand may be challengeable where the taxpayer has submitted a complete reconciliation but the final order proceeds only on the basis of a gross portal mismatch without considering the explanation.

This frequently arises in GSTR-1 versus GSTR-3B and GSTR-2B versus ITC disputes.

Violation of principles of natural justice

Depending upon the facts, issues may arise where material relied upon was not provided, an effective opportunity of hearing was not granted or relevant submissions were not considered.

Any such ground should be based on the actual procedural record rather than made as a general allegation.

Order beyond the show cause notice

If the adjudication proceeds on grounds materially different from those contained in the show cause notice, the scope of the notice and final findings should be examined carefully from an appellate perspective.

Incorrect penalty or fraud allegation

For periods governed by Section 74 or for penalty consequences under Section 74A, unsupported allegations of fraud, wilful misstatement or suppression to evade tax should be specifically examined.

The taxpayer should distinguish a genuine interpretational or reconciliation issue from conduct alleged to involve deliberate evasion.

GST Appeal to the Appellate Tribunal under Section 112

When does appeal lie to GSTAT?

Where a taxpayer is aggrieved by an order passed by the first Appellate Authority under Section 107 or by a Revisional Authority under Section 108, a further appeal may lie to the Goods and Services Tax Appellate Tribunal under Section 112, subject to the applicable statutory and procedural conditions.

The Goods and Services Tax Appellate Tribunal is now operational, and taxpayers should verify the latest filing procedure and applicable timelines for their particular orders before filing a second appeal.

FORM GST APL-05 for Tribunal appeal

An appeal to the Appellate Tribunal is filed in the prescribed form, presently FORM GST APL-05, with the relevant order, statement of facts, grounds, documents and statutory payments.

The second appeal should focus on errors in the first appellate order while maintaining a clear record of the original adjudication and first appeal proceedings.

Additional pre-deposit before GSTAT

Under the current Section 112 framework, the appellant is generally required to make an additional pre-deposit equal to 10% of the remaining disputed tax, in addition to the payment made for the first appeal, subject to the applicable statutory ceiling.

For penalty-only orders, the current statutory framework also contains a corresponding pre-deposit requirement. The precise computation should be verified from the law applicable on the date of filing.

Legacy GSTAT appeals require separate timeline review

Because the Tribunal became operational after a prolonged period during which taxpayers could not practically file second appeals, special notifications and procedural directions have applied to certain legacy cases.

Taxpayers dealing with older first appellate orders should therefore not calculate the GSTAT limitation mechanically without checking the specific notifications and procedural directions applicable to their case.

Common Mistakes While Filing GST Appeal

Waiting until the last week of limitation

A GST appeal often requires substantial reconciliation, legal research, documentation and pre-deposit arrangements. Waiting until the end of the limitation period can compromise the quality of the appeal.

Copying the notice reply as grounds of appeal

The notice reply addresses the department’s allegations. An appeal must additionally challenge the findings and reasoning contained in the final adjudication order.

A copy-paste of the earlier reply may therefore fail to address the actual errors committed in adjudication.

Relying only on DRC-07

DRC-07 is only a summary. Grounds of appeal should be prepared after reading the complete speaking order and comparing it with the show cause notice and submissions filed.

Not reconciling the disputed amount

The appeal should clearly reconcile the amount demanded, amount admitted, amount disputed and statutory pre-deposit.

Differences between the adjudication order, DRC-07 and portal liability should be identified before filing.

How EzyBiz India Assists with GST Demand Appeals

Review of GST demand orders

EzyBiz India Consulting LLP assists businesses in reviewing GST adjudication orders and determining the appropriate response, including rectification, first appeal and further litigation where applicable.

Our GST Assessment and Litigation Services cover assistance across the GST dispute lifecycle.

Preparation of GST first appeals

Our assistance may include:

• review of show cause notice and adjudication order;
• analysis of Sections 73, 74 or 74A;
• calculation of appeal limitation;
• review of jurisdiction and limitation issues;
• GSTR-1, GSTR-3B and GSTR-2B reconciliation;
• ITC and turnover reconciliation;
• pre-deposit computation;
• preparation of FORM GST APL-01;
• drafting statement of facts;
• drafting grounds of appeal;
• preparation of paper book and annexures;
• written submissions;
• personal hearing assistance;
• review of appellate orders; and
• support for further GST litigation.

Integrated support from assessment to litigation

A GST appeal is often stronger where the notice reply, reconciliations and documentary evidence have been prepared systematically from the beginning.

Businesses may therefore use our assistance for GST notice replies, GST audits, assessments, appeals and related litigation.

Frequently Asked Questions on GST Demand Orders and Appeals

What is the time limit for filing GST appeal under Section 107?

A taxpayer’s appeal under Section 107 is generally required within three months from communication of the decision or order. The Appellate Authority may allow a further period of one month where sufficient cause for delay is established.

What is the pre-deposit for first GST appeal?

The appellant must pay the admitted amount and generally deposit 10% of the remaining disputed tax, subject to the statutory ceiling of ₹20 crore. Separate provisions apply to penalty-only orders.

Is recovery automatically stayed after filing GST appeal?

Where the statutory amount prescribed under Section 107(6) has been paid, Section 107(7) provides that recovery proceedings for the balance amount are deemed to be stayed.

Can a DRC-07 demand be appealed?

The underlying adjudication decision or order giving rise to the demand may generally be appealed if it is an appealable order. The complete adjudication order should be reviewed rather than treating the DRC-07 summary itself as the complete reasoning of the authority.

Can an appeal be filed after four months?

Section 107 provides a normal three-month period and allows the Appellate Authority to condone delay for a further one month on sufficient cause. An appeal filed beyond the statutory condonable period can raise serious limitation issues and should be reviewed immediately based on the particular facts and applicable judicial position.

Can the Appellate Authority remand a GST case?

Section 107 provides that the Appellate Authority may confirm, modify or annul the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the original order.

Can new grounds be raised during the GST appeal hearing?

Section 107 permits the Appellate Authority to allow an additional ground that was not specified in the original grounds of appeal where it is satisfied that the omission was not wilful or unreasonable.

Can a Chartered Accountant represent a taxpayer in GST appeal?

An authorised representative eligible under the GST law may represent a taxpayer subject to the applicable provisions and procedural requirements. Depending upon the complexity and stage of litigation, coordination with legal counsel may also be appropriate.

What happens if the first GST appeal is unsuccessful?

Subject to the applicable law, an aggrieved taxpayer may consider a further appeal to the Goods and Services Tax Appellate Tribunal under Section 112. Subsequent remedies may involve the High Court or Supreme Court depending upon the nature of the dispute and statutory appellate framework.

Related Services

• GST Assessment and Litigation Services
• GST Notice Reply Services and Guide
• GST Audit Services
• GST Audit Checklist
• GST Return Filing Services
• GST Refund Services
• GST Registration Services
• GST and Indirect Tax Services

Official Resources

• GST Common Portal
• Central Board of Indirect Taxes and Customs – GST
• India Code – Central Goods and Services Tax Act, 2017

Prepared By:
EzyBiz India Consulting LLP

Reviewed By:
Anil Agrawal, Chartered Accountant
Founder, EzyBiz India Consulting LLP
20+ Years of Experience in Tax, GST, Regulatory Compliance and Business Advisory

Last Updated: September 2026

Disclaimer:
This article is intended for general informational purposes only and does not constitute legal, tax or professional advice. GST demand proceedings, limitation periods, pre-deposit requirements, appeal procedures, penalty consequences and available remedies depend upon the relevant financial year, statutory provision, nature of the order and facts of the particular case. Sections 73 and 74 apply to specified determination proceedings pertaining to periods up to FY 2023-24, whereas Section 74A applies to relevant determination proceedings for FY 2024-25 onward. Taxpayers should review the complete adjudication order, current statutory provisions, rules, notifications, circulars and judicial decisions before filing an appeal, making payment or taking any litigation decision.