6 per cent interest on pre-deposit amount if tax payer wins in CESTAT

NEW DELHI: The government will pay 6 per cent interest on pre-deposit amount paid by a taxpayer if the taxpayer wins appeal against the tax department before the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT), a senior finance ministry official said.

"Six per cent interest will be paid on pre-deposit amount from the day pre-deposit amount was deposited, if taxpayer wins the case in CESTAT," the official said.

Jaitley had proposed changes in the Excise Act to introduce pre-deposit of a small part of the duty or penalty demanded as a necessary condition to entertain appeals.

The existing provision required businesses to deposit whatever pre-deposit the Commissioner (Appeals) or the tribunal would order the businesses to pay.

Interest payment on such deposit is allowed under existing provision only if there is a delay of more than three months from the date of a decision on the appeal favouring the tax payer.

The changes today featured in the official amendments to the Finance Bill that the Finance Minister placed in the Parliament before the passage of the Bill. Finance Bill 2014 made it mandatory for taxpayers to deposit 7.5 per cent of the duty demanded before filing an appeal before the Commissioner (Appeals).

For appeals to CESTAT, the deposit requirement is 10 per cent of the duty demanded, or penalty imposed, or both. The Budget had also placed a ceiling of Rs 10 crore on the pre-deposit payable.