Summary: The GST Amnesty Scheme, introduced through Section 128A of the CGST Act, 2017, became effective on November 1, 2024, based on the GST Council’s 53rd and 54th meeting recommendations. It provides a waiver of interest and penalties on tax demands under Section 73 for FY 2017-18, 2018-19, and 2019-20, subject to full tax payment by March 31, 2025. Rule 164 outlines the procedure for availing the scheme. Applications must be filed using Forms SPL-01 or SPL-02, depending on the case type, and must be submitted within three months of the notified date. Tax payments must be made through DRC-03 or electronic liability registers. If multiple tax demand notices exist, separate applications must be filed for each. The scheme does not cover late fees or penalties related to delayed return filing. Appeals are restricted, with SPL-07 orders being appealable but not SPL-05 approvals. Additionally, tax adjustments under Section 16(5) and (6) must be considered before application submission. Taxpayers seeking partial waivers cannot opt for litigation on remaining dues. If the waiver is voided due to non-compliance, the original demand remains enforceable.
Based on the recommendations of the GST Council made in its 53rd meeting, Section 128A has been inserted in the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’) with effect from 01.11.2024 to provide for waiver of interest or penalty or both, relating to demands under section 73 of the CGST Act pertaining to Financial Years 2017- 18, 2018-19 and 2019-20, subject to certain conditions.
Subsequently, based on the recommendations of the GST Council made in its 54th meeting, Rule 164 has been inserted in Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST Rules’) with effect from 01.11.2024 vide notification No.20/2024- Central tax dated 8 th October 2024, providing for procedure and conditions for closure of proceedings under section 128A of CGST Act.
Vide notification No. 21/2024-Central tax dated 8th October 2024, 31.03.2025 has been notified under sub-section (1) of section 128A of CGST Act as the date on or before which the full payment of tax demanded in the notice/ statement/ order needs to be made by the taxpayer in order to avail the benefit of waiver of interest or penalty or both under the said section. (Full payment against order is compulsory to avail benefit of section 128A.)
For cases where the application is made as per the first proviso to the sub-section (1) of the section 128A of CGST Act, i.e. where appealate authority ask officer to pass order u/s 73 instead of section 74, the date on or before which the full payment of tax demanded in the order issued by the proper officer redetermining the tax under section 73 of CSGT Act needs to be made by the taxpayer, has been notified as six months from the date of issuance of such order by the proper officer redetermining the tax under section 73 of CGST Act.
Filling for Forms:
1. For cases referred in 128A(1) i.e. cases where notice is issued by officer but no order is passed SPL 01 need to file.
2. For cases referred in 128A(2) & 128A(3) i.e. cases where order u/s 73(9) is passed but no appeal order as per section 107 or tribunal order as per section 113 is passed, SPL 02 need to file.
SPL 01 and SPL 02 need to file before 3 months from notified date. i.e. 31st March 2025. If appeal is filled or writ petition is filled against order than same need to be withdraw before filling SPL 02. If withdrawal order is not received than taxpayer can attach application copy along with SPL 02 and file order of withdrawal can be submit within one month of application in form SPL 02.
In case the taxpayer has been issued multiple notices/ statements/ orders pertaining to demands under section 73, for period from July 2017 to March 2020, he is required to file a separate application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be, in respect of each of the concerned notice/ statement/ order.
Payment of Taxes
1. In case of notice u/s 128A(1) payment need to be made through DRC 03.
2. In case of notice u/s 128A(2) &(3) payment shall be made only by making payment against debit entry created in part II of Electronic Liability register. If payment is already made through DRC 03 than as per rule 142(2B) application in form DRC 03A need to file.
3. In cases where the amount of tax payable as per the notice/ statement/ order includes the amount that was demanded due to contravention of provisions of sub-section (4) of section 16, which is however not payable anymore due to the retrospective insertion of sub-section (5) and sub-section (6) to section 16, the full amount of tax payable as per the notice/ statement/ order as mentioned in sub-section (1) of section 128A for eligibility of waiver of interest or penalty or both shall be calculated after deducting the amount, which is not payable anymore as per sub-sections (5) or sub-section (6) of section 16, as per sub-rule (5) of Rule 164.
Processing of application
1. If SPL 01 filled than proper officer will be officer who is suppose to issue order under section 79 and if SPL 02 is filled than proper officer will be officer who is authorised to recovery under section 79.
2. If, on examination, he finds that the said application is liable to be rejected, he shall issue a notice to the applicant, within three months from the date of receipt of the said application, in FORM GST SPL-03 on the common portal.
3. On receipt of the notice in FORM GST SPL-03, the applicant may file his reply in FORM GST SPL-04, electronically on the common portal, within a period of one month from the date of receipt of the notice.
4. If proper officer is satisfied he shall issue SPL 05 and if not satisfied he shall issue SPL 07 for rejection.
5. If SPL 05 or 07 is not issued within time limit than it will be assumed that application is accepted.
6. If SPL 05 or SPL 06 is issued with condition that taxpayer should pay some additional amount and if taxpayer fail to pay same within time limit than waiver as per section 128A will be VOID.
Appeal:
1. No appeal can be filled against SPL 05.
2. Appeal as per 107 is eligible against order in form SPL 07.
3. Appeal can be filled only regarding waiver of interest and penalty and no other issues.
4. If appellate authority accept grounds of appeal than order in form SPL 06 will be issued.
5. If original appeal is withdraw for filling SPL 02 but officer pass SPL 07 i.e. amnesty application as per section 128A is not accepted
a. If taxpayer file appeal against SPL 07 and appeal is rejected than original appeal will restored.
b. If appeal is accepted and SPL 06 is issued than no appeal can be filled against same order.
c. If appeal is not filled against SPL 07 than original appeal will be restored.
Some Important points to remember:
1. Benefit provided under Section 128A will be applicable to taxpayers who have paid the tax component in full before the date on which the said section has come into effect.
2. No refund is allowed of original interest and penalty paid.
3. Benefit of waiver of interest and penalty shall not be applicable in the cases where the interest has been demanded on account of delayed filing of returns, or delayed reporting of any supply in the return, as such interest is related to demand of interest on self-assessed liability and does not pertain to any demand of tax dues and is directly recoverable under sub-section (12) of section 75.
4. Benefit under Section 128A is not available, if the taxpayer intends to avail partial waiver of interest or penalty or both, on certain issues, by making part payment of the amount demanded in the notice/ statement/ order, as the case may be, and opts to litigate for the remaining issues.
5. If order involve multiple periods than taxpayer need to pay tax of specified period and tax interest and penalty of other period. If same is payable as per SPL 05 than same need to paid before 3 months from date of order.
6. It is clarified that any penalty, including penalties under section 73, section 122, section 125 etc, demanded under the demand notice/ statement/ order issued under section 73, is covered under the waiver provided under Section 128A. However, late fee, redemption fine etc are not covered under the waiver provided under Section 128A.
7. The applicant is required to pay only the amount that is payable, calculated after deducting the amount not payable in accordance with sub-section (5) or sub-section (6) of Section 16, from the amount payable in terms of the notice or statement or order under section 73, as the case may be, before submitting the application. While calculating the amount deductible on account of not being payable in accordance with sub-section (5) or sub-section (6) of Section 16, from the amount payable in terms of the notice or statement or order under section 73, as the case may be, taxpayer is required to ensure that such amount is deducted only where ITC has been denied solely on account of contravention of Section 16(4) of the CGST Act and not on any other grounds.
*****
CA Ishwar Ram Yadav
FCA, Mcom
IDT Partner at K Y M & Associates
Working for Manufacturing Industries.
Author Bio
