(Supreme Court of India Judgement dated 19.5.2025 : Yasho Industries Pvt Ltd v Union of India)
GST Rule:
Under section 107(6) of the CGST Act, in order to file an appeal against tax demand
taxpayer must mandatorily pre deposit 10% of the disputed tax amount but it is nowhere
mentioned in the rule whether the amount has to be paid in cash or through Input Tax
Credit available in the Electronic Credit Ledger.
Background of the Case:
A GST demand was raised against Yasho Industries of Rs 3.36 crore & to challenge this
demand it wanted to file GST appeal for which 10% pre deposit is mandatory. The taxpayer
wanted to utilize its Input Tax Credit from the Electronic credit Ledger for the payment of the
deposit to which the tax authorities refused.
Yasho Industries challenged this in Gujrat High Court, which ruled in its favor, saying that the
law does not prohibit the use of Input Tax Credit for payment of mandatory pre deposit. The
government then appealed to the Supreme Court.
Supreme Court Judgment:
The Supreme Court upheld the decision of Gujrat High Court stating that taxpayers can use
Input Tax Credit available in the Electronic Credit Ledger to make the mandatory 10% pre
deposit for filing GST appeals under section 107(6) of the CGST Act.
Key Takeaway:
This landmark judgement offers big relief to businesses, especially those who hold huge ITC
balance in their Electronic Credit Ledger. Taxpayers can now utilize ITC for meeting the pre-deposit
obligations in GST appeals & avoid cash outflows.
-CA Finalist Anusha Bhatia
© Copyright 2025 Shyam Bhatia and Co