Your GST Appeal Succeeded. Here’s Exactly When — and How Fast — You Actually Get the Pre-Deposit Back

Your client’s GST appeal just succeeded in full. The order says nothing about refunding the 10% pre-deposit paid to file it, and you’ve just learned the department is appealing anyway. Do you wait, or file the refund claim today? CBIC has now answered that question in writing.

Sourcing note: verified directly from the circular PDF (A2Z Taxcorp’s mirror); the F. No. and signatory (Gaurav Singh, Commissioner, GST Policy Wing) match Circular 264/10/2026-GST, confirming both were issued from the same GST Policy Wing batch dated 26 October 2026.

By Circular No. 259/05/2026-GST (F. No. CBIC-20001/2/2026-GST, dated 26 October 2026), CBIC has clarified six practical questions on how the mandatory pre-deposit under Section 107(6) (first appeal) and Section 112(8) (Appellate Tribunal) of the CGST Act is computed and refunded. The admitted amount of a demand must be paid in full before an appeal is filed; the 10% pre-deposit is calculated only on the disputed tax amount, as the taxpayer itself specifies at filing (Table 14 of Form APL-01; Table 20 of Form APL-05). At the Tribunal stage, the 10% is calculated on the disputed portion of the liability as confirmed by the Appellate Authority, not the original demand. A refund order need not expressly direct the pre-deposit’s return — the taxpayer files the refund claim under entry S. No. 7 ("on account of order") of Form GST RFD-01. A pre-deposit refund cannot be denied merely because the Department has filed a further appeal — only an actual stay by the Tribunal or a Court blocks the refund. Interest under Section 115 runs from each pre-deposit’s own payment date; where deposits were made at both appellate levels, each is tracked separately. On a full remand, the appellant may claim a refund within the prescribed limitation period; on a partial remand, the balance is refunded only after the confirmed demand, plus interest, has been recovered or adjusted against the pre-deposit.

Why It Matters

The point practitioners most often get wrong is the "Department has appealed, so no refund yet" assumption — this circular makes clear that is not a valid basis to withhold a pre-deposit refund absent an actual stay. The admitted-versus-disputed split is also easy to miss at the filing stage: get that split wrong in Form APL-01 or APL-05 and the 10% is computed on the wrong base from day one, which can mean either an under-deposit (risking the appeal itself) or an over-deposit that then has to be separately recovered. Read together with CBIC’s Rule 96(10) retrospectivity circular issued the same day, this circular closes out another practical, taxpayer-facing procedural gap that courts and tribunals have been filling piecemeal through individual rulings — both appear to have been issued as part of the same GST Policy Wing clarificatory push on 26 October.

Key Takeaways

• The 10% pre-deposit is calculated only on the disputed tax amount, not the full demand — the admitted amount must be paid separately, in full, before the appeal is filed.
• At the Tribunal stage, the 10% is calculated on the disputed portion as confirmed by the Appellate Authority, not the original demand.
• A refund order need not expressly direct the pre-deposit’s return — file the claim proactively under S. No. 7 of Form GST RFD-01.
• A Department appeal alone does not block the refund; only an actual stay by the Tribunal or a Court does.
• Interest under Section 115 runs from each deposit’s own payment date, tracked separately where deposits were made at both appellate levels.
• On a partial remand, the balance refund follows only after the confirmed demand and interest are recovered or adjusted against the pre-deposit.

Practical Implications

For any firm managing multiple live GST appeals, this circular is worth a standing checklist item: confirm the admitted/disputed split at filing, and file the RFD-01 refund claim proactively on a favourable order rather than waiting for the order to expressly direct it or for the Department’s appeal window to lapse. Early GSTAT bench practice on whether refund claims under this circular’s guidance are processed without friction remains to be seen, given GSTAT’s own backlog issues documented elsewhere on Finoscape.

Action Checklist

• On every new GST appeal, confirm the admitted-versus-disputed split is correctly entered in Table 14 (Form APL-01) or Table 20 (Form APL-05) before the 10% pre-deposit is calculated and paid.
• On a favourable appellate order, file the Form GST RFD-01 refund claim under S. No. 7 immediately — do not wait for the order to expressly mention the pre-deposit.
• If the Department files a further appeal with no accompanying stay order, proceed with the refund claim; cite this circular if the officer resists on that basis alone.
• Where pre-deposits were made at both the first-appeal and Tribunal stages, track each deposit’s payment date separately for Section 115 interest purposes.

Relevant Sections, Rules & Notifications

CGST Act, 2017 — Section 107(6), Section 112(8), Section 115 · Form GST APL-01 (Table 14), Form GST APL-05 (Table 20), Form GST RFD-01 (S. No. 7) · Circular No. 259/05/2026-GST, F. No. CBIC-20001/2/2026-GST, dated 26 October 2026.

FAQs

Do I need to wait for the appellate order to mention a pre-deposit refund before claiming it?
No. Per Circular No. 259/05/2026-GST, the refund claim can be filed under S. No. 7 ("on account of order") of Form GST RFD-01 even where the order is silent on the pre-deposit.

Can the officer deny my refund just because the Department has filed its own appeal?
No — a pending Department appeal, by itself, is not a valid ground to deny the refund. Only an actual stay order from the Tribunal or a Court blocks it.

From when does interest on the pre-deposit refund run?
From the date each individual pre-deposit was paid, under Section 115 — tracked separately if deposits were made at both the first-appeal and Tribunal stages.

This article is for general informational purposes only and does not constitute legal or professional advice. Prepared by Finoscape Editorial Team — hello@finoscape.com.