GST Amnesty Scheme 2024 : Sec 128A of CGST Act 2017

A Comprehensive Guide to Waiver of Interest and Penalty

Introduction

The Goods and Services Tax (GST) Act, 2017, provides certain provisions for taxpayers to seek relief from interest and penalty imposed on them. One such provision is Section 128A r.w.t Rule 164, which outlines the procedure and conditions for the closure of proceedings under Section 128A of the CGST Act, 2017, generally termed as “GST Amnesty Scheme”. This rule provides a much-needed respite to taxpayers who may have inadvertently defaulted on their tax obligations for the period 01^st July 2017 to 31^st March 2020.

Key Provisions of Rule 164

Rule 164 primarily deals with the waiver of interest and penalty as mentioned in Sec 128A which is recently introduced by Section 146 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024. Rule 164 which outlines the procedural aspect of the for seeking benefit from Sec 128A was notified vide Notification No. 20/2024 – Central Tax dated 08^th October,2024, which specifies the following key points:

Eligibility for Waiver of Interest or Penalty:

• Notices or Statements mentioned in Sec 128A (1) (a):

Taxpayers who have received a notice or statement under Section 73(1) CGST Act, 2017 for period 01^st July 2017 to 31^st March 2020, can apply for waiver of interest or penalty or both.

• Orders mentioned in Sec 128A (1) (b) and (c):

Taxpayers who have received orders under Section 73(9) i.e. Order from Proper Officer or under Section 107(11) i.e. Order from Appellate Authority or under Section 108 (1) i.e. Order from Revisional Authority of the CGST Act, 2017, for period 01^st July 2017 to 31^st March 2020, can apply for waiver.

Application Process:

• Form GST SPL-01:

This form is used to apply for waiver in respect of notices or statements under Sec 128A (1) (a) to be filed within 3 months from date of payment to be notified u/s 128A. Since the notified date of payment is 31^st March 2025, technically date for filing application should be 30^th June 2025

• Form GST SPL-02:

This form is used to apply for waiver in respect of orders under Section 128A (1)(b) or (c) to be filed within 3 months from date of payment to be notified u/s 128A. Since the notified date of payment is 31^st March 2025, technically date for filing application should be 30^th June 2025.

There is only one exception in GST SPL-02 that for the Cases covered under first provision of Sec 128A(1), the time limit will be six months from the date of communication of such order

Payment of Tax:

• Full Payment of Tax:
  • In cases where the demand includes tax for erroneous refunds or for periods other than those mentioned in Section 128A(1), full payment is required before filing the application.
  • In cases where demand is raised due to ITC disallowance of Sec 16 (5) and Sec 16 (6), amount of tax payable should be reduced by such amount i.e. Tax to be Paid = Gross Demand as per Order (-) Demand of Tax attributable to Sec 16 (5) & (6)
• Payment through Only DRC-03:

Payments towards such tax demanded shall be made only by crediting the amount in the electronic liability register against the debit entry created by the said order by Filing DRC-03 and in cases where DRC – 03 is already filed before Order being passed in such cases DRC – 03A is required to be filled for creating the Debit Entry

Time Limit for Filing Application:

• General Time Limit:

Applications can be filed within three months from the date notified under Section 128A(1)(a).

• Specific Time Limit for cases referred to First Proviso to Sec 128A(1)

In such cases, the time limit is six months from the date of communication of the redetermination order.

Documents Required:

• Withdrawal of Appeals or Petitions:

Applicants must provide evidence of withdrawal of any appeals or petitions filed before appellate authorities, tribunals, or courts.

Processing of Applications:

• Notice to Applicant:

The proper officer may issue a notice in Form GST SPL-03 within period of 3 months from the date of receipt of such application if they believe the application is not eligible for waiver.

• Reply by Applicant:

The applicant can file a reply in Form GST SPL-04 within one month of receiving the notice.

• Order by Proper Officer:
  • If the application is approved, an order is issued in Form GST SPL-05.
  • If the application is rejected, an order is issued in Form GST SPL-07.

Time Limits for Issuing Acceptance or Rejection Orders:

• Where Notice is NOT served in Form GST SPL -03:

The proper officer must issue an order within three months from date of receiving the application in From GST SPL-01 or SPL-02.

• With Notice IS served in Form GST SPL-03:

The proper officer must issue an order within three months of receiving the reply or four months from the Date of issuing the notice, if no reply is received from the applicant.

Deemed Approval:

If no order is issued within the specified time limits as mentioned above, the application is deemed to be approved.

Appeal Against Rejection Orders:

• Restoration of Original Appeal:

If no appeal is filed against the rejection order issued in Form GST SPL-07, the original appeal which was withdrawn for making application under Sec 128A, if any, will be restored.

• Appellate Authority’s Order:
  • If an appeal is filed against Form GST SPL-07 and the appellate authority upholds the rejection, the original appeal stands restored,

Subject to the condition that applicant files an undertaking in Form GST SPL-08 within period of 3 months of issuance of order in Form GST APL-04, that neither he has filed or intends to file appeal against such order

• • If the appellate authority overturns the rejection, an order is issued in Form GST SPL-06 accepting the application.

Voiding of Waiver:

• Non-Payment of Additional Tax: If additional tax is required to be paid and it’s not paid within the specified time, the waiver becomes void.
• Non-Payment of Interest or Penalty: If interest or penalty is required to be paid and it’s not paid within three months of the order, the waiver becomes void.

Conclusion

Rule 164 provides a significant relief to taxpayers who may have inadvertently defaulted on their tax obligations. Generally Amnesty Schemes are simple and easy to comply but this Scheme involves many compliances with respect to Forms and time limit, It is advisable to consult a Professionals for any further action, by understanding the eligibility criteria, application process, and time limits, taxpayers can effectively avail themselves of this provision. However, it is important to note that the waiver is subject to certain conditions and timely compliance with the provisions of the rule.

Reference Documents:

1. The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.

2. Notification No. 20/2024 – Central Tax dated 08^thOctober,2024

3. Circular No. 238/32/2024-GST dated 15^thOctober,2024

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Disclaimer

> We request readers to seek professional advice before arriving at any decision/conclusion after reading. We are not responsible for any loss arising to anyone after referring and relying on this article. Above views are based on our understanding of the provisions.

> Author can be reached at [email protected]