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If an Indian GST adjudication order says you owe tax, interest or penalty, the amount is generally payable within three months after the order is served. Leaving it unpaid can lead to statutory recovery action and additional interest. If you disagree, a first appeal normally must be filed within three months after the order is communicated. The appeal route usually requires payment of the admitted amount plus a pre-deposit of at least 10% of the disputed tax. The GST Portal treats the remaining disputed amount as non-recoverable only after the appeal is admitted—not merely because you intend to appeal or upload an unacknowledged submission.
This article concerns a final demand order under India’s CGST framework. State or Union-territory GST law, the wording of your order and later notifications can affect the procedure. A show-cause notice is a pre-order stage with different response rules; the three-month payment period discussed here applies to an amount payable under an order.
Deadlines that control what happens next
Two clocks usually matter: the time to pay an order and the time to file a first appeal. They start from different events, so record both the service date and the communication date shown in your records.
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| Issue | General period | What the period means |
|---|---|---|
| Payment of an amount ordered under the CGST Act | Three months from service of the order | If the amount is still unpaid, recovery proceedings may be initiated. |
| First appeal | Three months from communication of the decision or order | An aggrieved taxpayer or unregistered person can appeal to the Appellate Authority. |
| Delay condonation for a first appeal | Up to one additional month | The appellate authority must be satisfied that sufficient cause prevented filing within the ordinary period. |
| First-appeal pre-deposit | At least 10% of disputed tax | The GST Portal FAQ describes this minimum, alongside payment of the admitted amount, for the appeal to proceed under the applicable rules. |
Section 78 of the CGST Act states that an amount payable under an order is to be paid within three months from service, failing which recovery proceedings may be initiated. For reasons recorded in writing, the proper officer can require payment within a shorter period. A shorter date in the order or a later written direction therefore deserves immediate attention.
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First check whether you have a notice or a final order
A show-cause notice asks you to explain why tax, interest or penalty should not be imposed. It is not the same as a final adjudication order and does not by itself trigger the section 78 three-month payment period. The response deadline and hearing process will be stated in the notice.
A final order determines an amount payable. The payment and appeal deadlines in this article are relevant once that order has been served or communicated. Identify the document number, date, issuing authority, tax period, Demand ID and the exact breakup of tax, interest and penalty before deciding whether to pay, appeal or do both.
If you do not pay the demand
Recovery can begin after the payment period
When the three-month period expires without payment, the law permits recovery proceedings. The statute does not say that every recovery method will be used, that all bank accounts will be frozen immediately or that property will automatically be seized. It gives the proper officer a choice of one or more lawful modes, depending on the circumstances and the amount due.
Money owed to you can be diverted
One listed method is deduction from money that is payable to the taxpayer. This can affect amounts otherwise due from a government department or another person where the statutory conditions and notices are met. Keep evidence of invoices, receivables and any correspondence from the department so that a deduction can be reconciled to the correct demand.
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Goods may be detained and sold
The recovery provisions include detention and sale of goods belonging to the defaulter. This is a legal recovery option, not a statement that goods will be taken in every case. Businesses holding inventory should maintain clear ownership, stock and transport records and respond promptly to any detention or sale notice.
A third party holding your money may receive a notice
The officer can issue a notice to a person who holds or may hold money for the taxpayer, requiring that person to pay the government instead. A customer, bank or other debtor that receives such a notice may have to comply rather than pay the taxpayer directly. The notice and the amount specified in it should be checked against the demand ledger.
Property can be attached and sold
Attachment and sale of property is another statutory mode. The availability of this power does not establish that a particular property will be attached, nor does it predict the timing or sequence of enforcement. If an attachment notice arrives, obtain professional advice immediately and verify the legal description, ownership and amount claimed.
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Interest continues to matter
The CGST Act provides for interest on tax that remains unpaid, calculated from the day after the prescribed due date at a rate notified by the government. The eventual figure depends on the liability, the relevant dates and the notification in force. Do not rely on a generic percentage; have the calculation checked against the order and current rate notification.
If you do not file an appeal
The ordinary first-appeal route closes with the deadline
A taxpayer or unregistered person aggrieved by an adjudicating authority’s decision generally has three months from communication to file a first appeal. If no appeal is filed in that period, the order is not challenged through that ordinary route within the stated time. Recovery exposure therefore remains, subject to whatever payment, correction or other remedy is legally available in the particular case.
A limited condonation window may exist
The GST Portal FAQ says the Appellate Authority may condone a delay of up to one further month when satisfied that sufficient cause prevented filing on time. Condonation is discretionary, not automatic. Preserve evidence explaining the delay—such as service records, portal outages or documented incapacity—and state the dates precisely.
The materials governing this deadline do not establish every possible remedy after the ordinary period and the condonation window. Missing both periods is not a reason to assume that every avenue is gone, but it is a reason to have the order reviewed urgently by a qualified Indian GST practitioner rather than relying on an informal request or a late, unacknowledged upload.
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How to appeal a demand correctly
Work out the amount payable before filing
The first appeal generally requires payment of the amount you admit as payable and a pre-deposit of at least 10% of the disputed tax, subject to the rules applicable to the order. “Admitted” and “disputed” must be separated in your working paper. Interest and penalty components can have their own treatment, so use the order’s breakup and the current portal calculation rather than applying 10% to the entire headline amount without checking.
File through FORM GST APL-01
The GST Portal FAQ describes filing a first appeal in FORM GST APL-01. Enter the order details, grounds of appeal, disputed amounts and payment information exactly as they appear in the order and liability register. Attach the order, evidence and a clear statement of the relief requested. Keep the generated filing reference and payment challans.
Obtain the final acknowledgement
The portal guidance indicates that, where a self-certified copy is required, the appeal is considered filed after the final acknowledgement in FORM GST APL-02 is issued with an appeal number. A draft, acknowledgement of an upload or a payment receipt without that final status is not the same evidence.
If the order is not available on the portal, the FAQ says the self-certified copy must be submitted within seven days. If it is submitted late, the filing date changes to the date on which the copy is submitted. Check the portal’s current instructions when you file because online workflows and labels can change.
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The portal FAQ says the balance disputed amount is flagged as non-recoverable if the appeal is admitted. That wording makes admission and acknowledgement critical. Merely planning to appeal, paying the pre-deposit without completing the filing, or submitting an appeal that has not been admitted does not establish the same treatment. Monitor the appeal number, admission status and liability register, and respond to any deficiency message.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Paying the right way: Demand ID versus DRC-03
A demand order such as DRC-07 creates a Demand ID in Part II of the Electronic Liability Register. The portal’s Payment towards Demand function is designed to apply the payment automatically to that Demand ID.
A payment made through DRC-03 is not automatically linked to the Demand ID and may not appear as adjusted in the liability register. That can make a paid amount look outstanding when you try to appeal or when an officer reviews the ledger. Before treating the demand as unpaid, compare the demand-specific entry with DRC-03 challans, bank debits and electronic cash or credit ledger records.
Keep the DRC-07 summary, every challan, the bank statement, payment reference and screenshots or downloaded acknowledgements. The portal procedure for filing an appeal checks amounts already paid against the Demand ID; having a complete trail helps identify a mismatch and request the appropriate adjustment.
DRC-07 is commonly used as the summary of an order, while the DRC form series also contains recovery-related notices and certificates. Form names and portal workflows can be revised, so use the form number shown in your current order and portal rather than assuming an older instruction still controls.
A practical decision path after receiving an order
- Secure the record. Download the complete order, annexures, service or communication evidence, DRC-07 summary and the Part II Electronic Liability Register entry.
- Separate the components. Reconcile tax, interest, penalty, admitted amount and disputed amount to your books and returns.
- Calculate both deadlines. Mark three months from service for payment and three months from communication for appeal; note any shorter payment date written by the officer.
- Choose the procedural route. If the liability is accepted, use the portal’s Demand ID payment path. If it is disputed, prepare the admitted payment, pre-deposit and APL-01 filing without waiting until the last day.
- Verify acknowledgement. Obtain APL-02 and an appeal number where required. Check that the appeal is admitted and that the portal reflects the disputed balance’s non-recoverable status.
- Reconcile the ledger. Confirm that each payment is shown against the Demand ID. Investigate any DRC-03 amount that remains unlinked and retain proof while requesting correction.
- Escalate early. If a deadline has passed, a recovery notice has arrived, property or goods are threatened, or the amount is material, have an Indian GST professional review the file immediately.
Mistakes that create avoidable exposure
- Confusing a notice with an order: Replying to a show-cause notice is not the same as paying or appealing a final demand.
- Counting from the wrong date: The payment clock runs from service, while the first-appeal period runs from communication. Preserve evidence for both.
- Assuming an upload is an appeal: Without the required final acknowledgement and appeal number, you may not have proof of a valid filing.
- Paying only the pre-deposit: The appeal process generally also requires the admitted amount. Calculate both separately.
- Using DRC-03 without reconciliation: A DRC-03 payment can remain unlinked to the Demand ID, so do not assume the liability register has been cleared.
- Expecting an automatic stay: Recovery treatment for the disputed balance depends on admission of the appeal, not simply on intention to challenge the order.
- Assuming enforcement is automatic: The statute lists possible modes; it does not establish that every account, asset or shipment will be seized or that prosecution will automatically follow.
When professional review is especially urgent
Obtain advice promptly if the order was served at an old address, the portal shows a different date, the tax period or legal entity is wrong, payments are missing from the Demand ID, the three-month period is close to expiring, or a recovery notice has already been issued. Give the adviser the order, service proof, return data, reconciliation, payment receipts and any correspondence. A professional can assess the grounds of appeal, the condonation explanation, the correct pre-deposit and any remedy that may remain after the first-appeal window.
What the rules do not establish
The statutory and portal guidance does not provide a universal recovery timetable, an enforcement probability, an average interest amount or a guarantee that a particular asset will be targeted. Outcomes depend on the order, the authority, the taxpayer’s records and current notifications. Treat the periods and thresholds above as procedural starting points, then verify the exact order and current GST Portal instructions before acting.
For a real demand, the safest course is to decide quickly whether the amount is admitted or disputed, meet the payment and appeal requirements that apply, secure formal acknowledgement and keep the Demand ID ledger accurate. Delay can leave the order exposed to recovery while interest continues to accrue.
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