GST AMNESTY SCHEME FOR JULY 2017 TO MARCH 2020.
The Central Government is going to introduce a new amnesty scheme for the GST taxpayers relating to CGST, IGST, and UTGST disputes relating to the cases covered under Section 73(1) of the CGST Act, 2017, as per the proposals in the Budget, 2024. For this a new Section 128A has been proposed to be inserted in the CGST Act, 2017, and the said Section applies mutatis mutandis to the IGST and UTGST. It is expected that similar enactments in the State Taxes will also be made shortly. In brief, the said Section proposes to recover the GST, by waiver of interest and penalty in cases covered under Section 73 and also cases where there is appellate order for denovo proceedings relating to Section 74. The scheme covers the period from the date of introduction of GST till the FY 2019-20 only.
The new Section 128A proposes that a person chargeable with tax may pay the amount of tax pertaining to the notice or statement or any appellate orders of the Appellate Commissioner/ Tribunal in respect of the demand pertaining to Section 73(1) of the CGST Act, 2017, related to the period 01.07.2017 to 31.03.2020. The government will notify the specific date for the said payment to be made by such person, and upon the deposit of the amount of tax demanded, no interest under Section 50 of the Act will be payable thereon. It further lays down that the proceedings related to the said case will be concluded subject to the prescribed conditions, meaning thereby that no penalty is liable to be paid.
The first proviso to the new Section 128A to be inserted lays down where a notice has been issued under sub- section (1) of section 74, and an order is passed or required to be passed by the proper officer in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court in accordance with the provisions of sub-section (2) of section 75, the said notice or order shall be considered to be a notice or order, as the case may be, referred to in clause (a) or clause (b) of this sub-section, which means that such Notice or order shall be considered to be notice at par with the notice/statement/order issued under Section 73(1) of the Act. Hence, it means that the benefit of amnesty shall also be available in this case.
However, there is a rider, through a second proviso to the above-said Section, that where the Department has gone in appeal, the person chargeable with tax has to pay the amount of additional demand, if any, within three months of the orders to be passed in such appeals.
The amount of interest and penalty, if any, already deposited before the introduction of the scheme is not refundable under any circumstances.
Further, the scheme does not apply to the cases of the erroneous refunds.
The benefit cannot be availed by a person who has filed an appeal or writ before the appellate authorities /Tribunal / Court until and unless the same is withdrawn.
Once the the proceedings are concluded on payment of the due amount under the Scheme, further appeal against the said orders passed by the original adjudicating authority or the appellate authority, under Section 107 or 112 is prohibited.
For the sake of original reading, the relevant Section 128A proposed to be introduced in CGST Act, 2017 is reproduce below:-
“128A. (1) Notwithstanding anything to the contrary contained in this Act, where any amount of tax is payable by a person chargeable with tax in accordance with,––
- a notice issued under sub-section (1) of section 73 or a statement issued under sub-section (3) of section 73, and where no order under sub-section (9) of section 73 has been issued; or
- an order passed under sub-section (9) of section 73, and where no order under sub-section (11) of section 107 or sub-section (1) of section 108 has been passed; or
- an order passed under sub-section (11) of section 107 or sub-section (1) of section 108, and where no order under sub-section (1) of section 113 has been passed,
pertaining to the period from 1st July, 2017 to 31st March, 2020, or a part thereof, and the said person pays the full amount of tax payable as per the notice or statement or the order referred to in clause (a), clause (b) or clause (c), as the case may be, on or before the date, as may be notified by the Government on the recommendations of the Council, no interest under section 50 and penalty under this Act, shall be payable and all the proceedings in respect of the said notice or order or statement, as the case may be, shall be deemed to be concluded, subject to such conditions as may be prescribed:
Provided that where a notice has been issued under subsection (1) of section 74, and an order is passed or required to be passed by the proper officer in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court in accordance with the provisions of sub-section (2) of section 75, the said notice or order shall be considered to be a notice or order, as the case may be, referred to in clause (a) or clause (b) of this sub-section:
Provided further that the conclusion of the proceedings under this sub-section, in cases where an application is filed under sub-section (3) of section 107 or under sub-section (3) of section 112 or an appeal is filed by an officer of central tax under sub-section (1) of section 117 or under sub-section (1) of section 118 or where any proceedings are initiated under sub-section (1) of section 108, against an order referred to in clause (b) or clause (c) or against the directions of the Appellate Authority or the Appellate Tribunal or the court referred to in the first proviso, shall be subject to the condition that the said person pays the additional amount of tax payable, if any, in accordance with the order of the Appellate Authority or the Appellate Tribunal or the court or the Revisional Authority, as the case may be, within three months from the date of the said order:
Provided also that where such interest and penalty has already been paid, no refund of the same shall be available.
(2) Nothing contained in sub-section (1) shall be applicable in respect of any amount payable by the person on account of erroneous refund.
(3) Nothing contained in sub-section (1) shall be applicable in respect of cases where an appeal or writ petition filed by the said person is pending before Appellate Authority or Appellate Tribunal or a court, as the case may be, and has not been withdrawn by the said person on or before the date notified under sub-section (1).
(4) Notwithstanding anything contained in this Act, where any amount specified under sub-section (1) has been paid and the proceedings are deemed to be concluded under the said sub-section, no appeal under sub-section (1) of section 107 or sub-section (1) of section 112 shall lie against an order referred to in clause (b) or clause (c) of sub-section (1), as the case may be.”.
It may be pertinent to mention here that from the past experience, it has been found that most of the demand cases raised by the Central Tax authorities pertain to Section 74, therefore, the benefit in such cases will not be available except few covered under the first proviso to sub-section (1) above. However, the taxpayers administered by the State Tax Departments may take more benefit from the scheme as generally the demands raised are under Section 73 of the Act.
The taxpayers must get ready to take full advantage and get rid of the unnecessary litigation by paying the tax and get waiver from interest and penalties in genuine demand cases, as the detailed rules/guidelines for the scheme are likely to be rolled out in near future.
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