The GSTN has issued an important Advisory dated 03.04.2026, addressing a practical difficulty faced by taxpayers in filing appeals under Section 107 of the CGST Act, 2017, particularly in cases where adjudication orders reflect a “NIL” demand despite an underlying dispute on tax liability. This issue typically arises where the taxpayer has made voluntary payment of tax, interest, or penalty at the show cause notice (SCN) stage without admitting liability, and the adjudicating authority subsequently passes an order treating such payment as full discharge without expressly determining the liability.
The advisory explains the system-driven limitation on the GST portal. When an order-in-original is passed, a Demand ID is generated in the Demand and Collection Register (DCR). However, where the order records “NIL” demand, the system creates a zero-value entry, implying no outstanding liability. Consequently, while filing Form APL-01, the portal throws an error stating that the disputed amount cannot exceed the demand amount, thereby effectively preventing the taxpayer from filing an appeal. This results in a denial of the statutory right to appeal, not due to any legal restriction, but due to a technical/system constraint.
Importantly, the advisory clarifies the legal position that payment made during the SCN stage, without explicit admission of liability, does not amount to acceptance of the demand. Therefore, the taxpayer retains the right to contest the liability and prefer an appeal. However, this right is rendered ineffective where the adjudication order incorrectly reflects NIL demand.
As a remedial measure, GSTN has advised taxpayers to seek rectification of the adjudication order from the proper officer. The taxpayer should file a rectification application through the GST portal requesting the authority to correctly reflect the demand amount in the order. Once the rectified order is issued capturing the actual liability, the taxpayer can proceed to file an appeal within the prescribed limitation period.
The complete Advisory can be accessed at https://www.gst.gov.in/newsandupdates/read/655
