The Ministry of Finance has notified that the Section 128, 129 and 130 of the Finance Act, 2025 (7 of 2025) which pertains to the pre-deposit for filing an appeal, Penalty for non-compliance of Track and Trade Mechanism for certain goods, and Track & Trace Mechanism respectively will be effective from 01/10/2025.

Presently, as per Section Section 129 of the Finance Act, 2025 (7 of 2025) or Section 107 of the CGST Act the taxpayers were required to make a pre-deposit of 25% of the penalty only in cases where the penalty was imposed under Section 129(3) (detention, seizure, and release of goods and conveyances in transit). For penalties under other provisions, no pre-deposit was required.

However, from 01/10/2025, a uniform 10% pre-deposit of the penalty amount will apply in all penalty appeals, regardless of the provision under which the penalty has been levied.

The law was silent on pre-deposit in cases where the dispute pertained only to penalties. But from 01.10.2025) uniform 10% pre-deposit of the penalty amount has now been prescribed for appeals before the Tribunal.

Notification Details

Notification No. 16/2025–Central Tax

Date: 17/09/2025

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