Frequently Asked Questions (FAQ) on Availment of Benefit under Section 128A of the Central Goods and Services Tax Act, 2017
The Amnesty by way of providing the waiver of interest or penalty or both under Section 73 for the Financial Year 2017-18, 2018-19 and 2019-20 was brought by the GST Council to ease out the challenges faced by the taxpayers and to minimize the labyrinth of litigation. To streamline the application process Central Board of Indirect Tax and Customs (CBIC) by way of issuance of the Circular bearing no. 238/32/2024-GST dated 15.10.2024 had clarified the procedure which needs to be followed for filing the Application and also cleared various doubts related to Section 128A.
Now, after about four months of its introduction, CBIC has issued another Circular bearing No. 248/05/2025-GST dated 27.03.2025 providing clarification on the various issues related to availment of benefit under Section 128A.
In wake of this, the present note intends to provide the clarification to ease out the process of filing the Application under Section 128A.
1. What is Section 128A of the CGST Act, 2017?
Section 128A of the CGST Act, 2017, was introduced following the recommendations of the GST Council during its 53rd and 54th meeting. It allows for the waiver of interest or penalty (or both) related to demands raised under Section 73 of the Act for the period from 1st July 2017 to 31st March 2020. This provision was notified to be applicable from 1st November 2024.
2. What is the eligibility criteria to avail the benefit under Section 128A of the CGST Act, 2017?
Taxpayers must have received a demand notice or an adjudication order under Section 73, and the demand should relate to the period between 1st July 2017 and 31st March 2020. The benefit can be availed if certain conditions, such as payment through the prescribed mode, are satisfied.
3. Is it mandatory to make the payment through FORM GST DRC-03 to avail the benefit under Section 128A?
Yes, payments need to be made through FORM GST DRC-03 for claims made after the Notification of Section 128A (i.e., after 1st November 2024). However, payments made while filing Form GSTR-3B before the Notification date i.e., 1st November 2024 are also eligible for the benefit, provided they were intended for the demand in question.
4. If the taxpayer had paid the tax via GSTR-3B before 1st November 2024, can he still avail the benefit under Section 128A?
Yes, taxpayers who had made the payment via GSTR-3B before 1st November 2024 for demands relating to the specified period (1st July 2017 to 31st March 2020) are eligible for the benefit under Section 128A. The payment must have been intended to settle the relevant tax liability, and eligibility will be verified by the Proper Officer.
5. Can taxpayers avail the benefit if their notice/statement/order covers both the period under Section 128A (1st July 2017 – 31st March 2020) and a period outside of it?
Yes, taxpayers can avail the benefit for the period covered under Section 128A (1st July 2017 – 31st March 2020) even if the demand relates to periods both within and outside the scope of this Section. In such cases, the taxpayer must file an application under FORM SPL-01 or FORM SPL-02 after paying the tax for the period covered under Section 128A and notify by way of filing a written Application to the Appellate Authority of their intent to withdraw the appeal for that period.
6. Does taxpayers need to withdraw the entire appeal if the demand pertains to both the period under Section 128A and a period outside it?
No, it is not necessary to withdraw the entire appeal. Taxpayers only need to withdraw the appeal for the period covered under Section 128A (i.e., FY 2017-18 to 2019-20). For the remaining period, the Appeal may proceed as per the usual process, and the Appellate Authority or Tribunal shall consider the taxpayers request to proceed with the Appeal only for the non-eligible period.
7. What happens if the taxpayer makes a payment for part of the demand i.e., for the period covered under Section 128A but do not withdraw the appeal for that period?
If the taxpayer makes any payment for the period covered under Section 128A and do not withdraw the appeal for that period, the Appellate Authority shall pass appropriate orders even for the period which is covered under Section 128A because he was not made aware of the application under Section 128A being filed. Therefore, it is mandatory to intimate the Appellate Authority in writing about the withdrawal of the Appeal for the period covered under Section 128A.
8. Can the taxpayer file an appeal for the period covered under Section 128A and still avail of the benefit of interest/penalty waiver for that period?
To avail of the benefit under Section 128A, taxpayer must withdraw the appeal for the period between 1st July 2017 and 31st March 2020. If taxpayers wish to continue with the appeal for the periods outside the specified period, taxpayers can do so by intimating the same to the Appellate Authority.
9. Is there any specific procedure prescribed to be followed when making a payment under Section 128A?
Yes, after making the necessary payment through FORM GST DRC-03, taxpayers must follow the procedure outlined in Rule 164 of the CGST Rules. This includes filing the appropriate application in FORM SPL-01 or FORM SPL-02 as the case may be, and informing the Appellate Authority or Tribunal of their intent to withdraw the appeal for the period covered under Section 128A.
10. What is the due date for the payment of tax payable after filing the waiver application?
As per Notification 21/2024-CT dated 08.10.2024, the due date for the payment of tax in order to be eligible for filing the waiver application is 31.03.2025. Taxpayers must make the payment of the requisite tax before this date only.
11. What is the last date of filing the waiver applications?
The last date of making the full payment of tax demanded is on or before 31.03.2025 and the due date for filing the waiver application under SPL 01/02 is within three months from 31.03.2025 i.e., 31.06.2025.
12. What happens if the taxpayer withdraws the appeal before filing an application in FORM GST SPL-02 and the application for a waiver is rejected?
If the Appellate Authority holds that the Proper Officer has rightly rejected the application in FORM GST SPL-02 and issues an order in FORM GST APL-04, the original appeal filed will be restored, subject to the condition that an undertaking in FORM GST SPL-08 is submitted on the common portal. This undertaking must state that the taxpayer has neither filed nor intend to file any further appeal against the Appellate Authority’s order.
13. What if the taxpayer files an appeal against the rejection order issued under Section 128A, and the Appellate Authority disagrees with the rejection?
If the Appellate Authority holds that the proper officer wrongly rejected the taxpayers’ application and issues an order in FORM GST SPL-06, granting the waiver of interest or penalty (or both), no further appeal against the order issued in FORM GST SPL-06 is required to be filed and the taxpayer would be extended the benefit of waiver of interest or penalty (or both).
14. What if the Order issued under Section 74 gets converted into Section 73 on not finding elements of fraud, suppression or wilful mis-statement? Can the taxpayer file the application under Section 128A?
Where the proceedings earlier initiated under Section 74 and the adjudication is done in terms of Section 73 as per Section 75(12), the application for availing the benefit under Section 128A will have to be filed within six months from the date of communication of Order under Section 73.
15. What will be the date of payment, if any, on case the proceedings are converted from Section 74 to Section 73?
As per the author in case the proceedings are converted from Section 74 to Section 73, the due date of payment would also be within six months from the date of communication of Order under Section 73 as there is no specific date which has been provided by way of the Circulars/clarifications issued.
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[The views expressed are strictly personal. For feedback or queries, please write to the authors at bhaveshmittal@hnaindia.com or alankarsingh@hnaindia.com.]
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