All You Need to Know About GST Amnesty Scheme 2024 under Section 128A & ITC Reinstatement under Section 16(5) – Relief for ITC Denied under Section 16(4).
Overview:
1. The Central Board of Indirect Taxes and Customs (CBIC) introduced the GST Amnesty Scheme 2024 via Section 128A of the CGST Act and Rule 164 of the CGST Rules.
This scheme offers waiver of interest and penalty for related to tax demands raised under Section 73 of CGST Act for FY 2017-18 to 2019-20, excluding cases under Section 74 involving fraud, misstatement, or suppression for the period July 1, 2017 to March 31, 2020.
2. The Legislative Authority: Parliament of India via the Finance Act, 2024 introduced the Section 16(5) Allows ITC claimed in GSTR-3B filed up to 30.11.2021 to be treated as valid, even if beyond 16(4) deadline for the period July 1, 2017 to March 31, 2021 notified vide Notification No. 28/2023 – Central Tax dated 18th August 2023 and CBIC issued implementation guidance through Circular No. 237/31/2024-GST dated 15.10.2024 –> Explained how taxpayers can file rectification applications for past denial of ITC under Section 16(4), if eligible under 16(5) and Provided format of Annexure A.
Section 16(5) was introduced to provide relief to taxpayers denied Input Tax Credit (ITC) due to time-barred claims under Section 16(4) for the period July 1, 2017 to March 31, 2021.
This guide consolidates all relevant provisions, deadlines, notifications, and circulars to help taxpayers comply and avail of the both scheme benefits.
I. Section 128A – GST Amnesty Scheme 2024
Legal Framework:
- Introduced via Finance Act, 2024
- Effective from 1st November 2024
- Supported by:
Scope: Waiver of interest and/or penalty related to tax demands raised under Section 73 of CGST Act for FY 2017-18 to 2019-20, excluding cases under Section 74 involving fraud, misstatement, or suppression for the period July 1, 2017 to March 31, 2020.
Eligibility Conditions:
1. Demand/Notice issued under Section 73.
2. No fraud/misstatement involved. (If initially under Section 74, must be reclassified under Section 73 via Section 75(2)).
3. Application to be filed via:
-
- SPL-01 – If only Notice/Statement issued.
- SPL-02 – If Order has been issued under Section 73/107.
Procedure For reclassifying Order Under Section 74 to Section 73 via Section 75(2).
If an order or notice has been issued under Section 74 of the CGST Act (which involves allegations of fraud, willful misstatement, or suppression of facts), but you believe that these elements are not present in your case, Section 75(2) provides a remedy. It allows reclassification of the proceeding from Section 74 to Section 73 File an appeal under Section 107 (first appellate authority) against the Section 74 order and argue that There was no fraud, suppression, or willful misstatement in this case and should fall under Section 73, not Section 74.
Apply for Amnesty (if reclassified) Once your case is reclassified under Section 73, Pay the tax amount (if not already paid) File Form SPL-02 on the GST Portal under Section 128A Amnesty Scheme, for waiver of interest and penalty Deadline for tax payment: 31st March 2025
Section 75(2) of the CGST Act, 2017
“Where the Appellate Authority or Appellate Tribunal or Court concludes that the notice issued under section 74 is not sustainable for reason that the charge of fraud, willful misstatement or suppression of facts to evade tax has not been established, the proper officer shall determine the tax payable deeming it to be under the provisions of section 73.”
Key Dates:
| Event | Deadline |
| Tax Payment (via DRC-03 or Payment Towards Demand) | 31st March 2025 |
| Amnesty Application Filing (SPL-01 / SPL-02) | 30th June 2025 |
CBIC Clarifies Key Aspects of Section 128A Waiver Scheme under GST via Circular No. 248/05/2025-GST Dated 27th March 2025
The CBIC, through this circular, has provided critical clarifications on the implementation of Section 128A of the CGST Act, 2017. These clarifications are aimed at resolving practical challenges faced by the trade and industry in availing the benefits under this provision, especially concerning payments already made through GSTR-3B and partially covered periods in adjudication orders. The CBIC had earlier issued Circular No. 238/32/2024-GST dated 15th October 2024 to clarify preliminary implementation issues. However, additional representations were received, leading to the issuance of this circular to ensure uniformity and ease of compliance.
Clarifications from Circular No. 248/05/2025-GST:
- GSTR-3B payments made before 01.11.2024 are eligible.
- No requirement to withdraw entire appeal if order covers periods beyond FY 2019-20.
Payments Made Through GSTR-3B (instead of DRC-03) Before 1st November 2024 – Eligibility for Waiver
If the tax payment was made prior to 01.11.2024 via GSTR-3B, and it was intended to settle the same demand, such cases shall be eligible for the waiver under Section 128A, subject to verification by the proper officer.
Note:
Post 01.11.2024, all payments under Section 128A must strictly be made via DRC-03, or through payment towards demand Menu and not through GSTR-3B.
Explanation:
As per the latest clarification, tax paid through GSTR-3B before 01-11-2024 will be eligible for the benefit under Section 128A of the CGST Act, provided the payment was made towards the demand raised under Section 73 and is verifiable by the proper officer.
In many cases, taxpayers paid tax in the GSTR-3B return filed for the month of September (of the following financial year), immediately after receiving an indication/notice regarding liability. Sometimes, even before the issuance of the official order, taxpayers had already discharged their tax liability through GSTR-3B, unknowingly complying with the demand.
In some other instances, taxpayers paid the tax even after the adjudication order, or before but using DRC-03. Such taxpayers may now adjust the payment by filing DRC-03A, and claim the benefit under Section 128A.
Therefore, GSTR-3B tax payments, if made before 01-11-2024, will be considered eligible under Section 128A, subject to verification by the jurisdictional officer. Similarly, payments made via DRC-03 or DRC-03A will also be considered as “payment towards demand” under this section.
Form GST DRC-03A:
Form GST DRC-03A is a functionality introduced on the GST portal to adjust payments already made via Form GST DRC-03 against any outstanding demand shown in the electronic liability register. It is applicable to taxpayers against whom demand has been raised through orders such as Form DRC-07, DRC-08, MOV-09, MOV-11, or APL-04, and who have made payments under the ‘Voluntary’ or ‘Others’ categories through DRC-03. Using DRC-03A, such taxpayers can link their past payments to specific pending demand orders for proper adjustment. While filing this form, the taxpayer must enter the ARN of the original DRC-03 and select the relevant demand order number from a dropdown. The system then displays details of the demand and the corresponding payment for confirmation and adjustment.
Amended Rule 164 Highlights:
- Taxpayers need not pay for periods not covered under Amnesty if order covers periods beyond 128A.
- Application can still be filed if only part of demand/order is covered if order covers periods beyond 128A.
Portal Update:
- Withdrawal of appeals in APL-01 format must be coordinated with the Appellate Authority and State Nodal Officer if portal does not allow direct withdrawal.
Notification No. 11/2025 – Central Tax:
CBIC issued Notification No. 11/2025 – Central Tax dated 27.03.2025 to amend the Rule 164 of CGST Rules to provide that taxpayers need not to pay full amount of tax demanded in notice or order where notice or order issued contains demand for both period i.e. for the period covering under amnesty scheme and period not covered under amnesty scheme.
What is amendment of Rule 164(4)?
Where a Notice or Order issued contains demand –
a) partly for the period covered under amnesty scheme and
b) partly for the period not covered under amnesty scheme,
in such a case, taxpayer is eligible to file application under this scheme, on payment of full tax relating to only specified period covered under amnesty scheme as per Section 128A.
Earlier taxpayer was required to pay full amount of tax for entire notice or order including for the period not covered under amnesty / waiver scheme as per Section 128A. Therefore after amendment taxpayer is not required to pay tax for the period not covered under section 128A to apply for amnesty scheme.
Amended Rule 164(4)
(4) Where the notice or statement or order mentioned in sub-section (1) of section 128A includes demand of tax, partially for the period mentioned in the said sub-section and partially for the period other than that mentioned in the said sub-section, an application under sub-rule (1) or sub-rule (2) may be filed only after payment of the full amount of tax 2[related to period mentioned in the said sub-section and] demanded in the said notice or statement or order, on or before the date notified under the said sub-section.
Explanation:
Further, an explanation has also been inserted to clarify that no refund shall be granted for tax, interest, or penalty already paid before the enactment of the CGST (Second Amendment) Rules, 2025, in cases where demand covers both eligible and ineligible periods.
Amendment to Rule 164(7):
CBIC inserted a proviso to Rule 164(7) to provide the procedure to be followed for common notice or orders issued containing both periods i.e. period covered under Section 128A and period not covered u/s 128A
Second Proviso to Rule 164(7) –
Provided further that where the notice or statement or order mentioned in sub-section(1) of section 128A of the Act includes demand of tax, partially for the period mentioned in the said subsection and partially for the period other than that mentioned in the said sub-section, the applicant instead of withdrawing the appeal, shall intimate the appellate authority or Appellate Tribunal that he does not wish to pursue the appeal for the period mentioned in the said sub-section and the relevant authority shall, after taking note of the said request, pass such order for the period other than that mentioned in the said sub-section, as he thinks just and proper.
Explanation,– For the removal of doubt, it is clarified that the appeal application shall be deemed to have been withdrawn to the extent of the said intimation for the period from the 1st July, 2017 to the 31st March, 2020 or part thereof, for the purpose of sub-clause (3) of section 128A.
The taxpayer is now allowed to:
1. Make payment only for the periods covered under Section 128A (i.e., FY 2017-18 to FY 2019-20).
2. File FORM SPL-01 or SPL-02 for the relevant part.
3. Inform the appellate authority that the appeal will not be pursued for the covered period.
4. The authority will continue hearing the remaining part of the appeal for periods not covered under Section 128A.
II. Section 16(5) – ITC Reinstatement for Denials Under Section 16(4)
Legal Framework:
- Introduced via Finance Act 2024
- Supported by:
Section 16(5) of the CGST Act, introduced via the Finance Act 2023 and notified on 18th August 2023, provides a major relief to taxpayers whose Input Tax Credit (ITC) was earlier denied under Section 16(4) due to late availing beyond the prescribed time limit.
As per Section 16(5), ITC claimed in GSTR-3B returns filed up to 30th November 2021 shall be deemed to have been availed within time for the financial years 2017-18, 2018-19, 2019-20, and 2020-21. This provision overrides the time restriction under Section 16(4) and reinstates ITC if availed by the specified date.
Demands raised under Section 73 or 74 of CGST Act for FY 2017-18 to 2019-20, for the period July 1, 2017 to March 31, 2021 denied under Section 16(4) due to late availing ITC beyond the prescribed time limit.
Benefits of Section 16(5):
- ITC previously denied under Section 16(4) (for delay) can now be reinstated.
- Ensures rightful credit to taxpayers who filed returns up to 30-11-2021.
- Avoids unnecessary tax demand, interest, and penalty.
Who Can Apply?
- Taxpayers who claimed eligible ITC for FY 2017-18 to 2020-21.
- Filed GSTR-3B return with such ITC on or before 30th November 2021.
- Received notice or order denying ITC solely on the ground of delay under Section 16(4).
Important Due Date:
To benefit from Section 16(5), taxpayers must file a rectification application along with Annexure A (as per CBIC Circular No. 237/31/2024-GST) on or before 7th April 2025 to get the benefit of ITC reinstatement.
What Section 16(5) States: ITC claimed in GSTR-3B filed up to 30th November 2021 will be considered valid for:
- FY 2017-18
- FY 2018-19
- FY 2019-20
- FY 2020-21
How to Avail the Benefit:
- File Rectification Application with Annexure A.
- Must be filed by: 7th April 2025
Don’t Confuse the 3 Deadlines – They Apply To Different Remedies.
| Purpose | Section | Due Date | Form |
| ITC Rectification (for 16(4) Denial) | Section 16(5) | 07-04-2025 | Rectification Application + Annexure A |
| Tax Payment for Amnesty | Section 128A | 31-03-2025 | DRC-03 / Payment Towards Demand |
| Amnesty Application Filing | Section 128A | 30-06-2025 | SPL-01 / SPL-02 |
Frequently Asked Questions (FAQ)
Q1: I claimed ITC for FY 2018-19 in October 2021. Am I eligible under Section 16(5)?
Answer: Yes, if the claim was in a GSTR-3B filed up to 30th November 2021, you are covered.
Q2: Can I file for amnesty if the order includes FY 2020-21 also?
Answer: Only FY 2017-18 to 2019-20 are eligible. You can still apply but only for the portion covered. Mention this in the SPL form.
Q3: I paid tax via GSTR-3B in 2023, will it be considered under Section 128A?
Answer: Yes, if the payment was made before 01-11-2024 and is verifiable as payment towards demand.
Q4: What if I already paid penalty and interest voluntarily?
Answer: Such payments are not refundable. Amnesty applies only to disputed amounts.
Q5: What if my case was initially under Section 74?
Answer: If later held as non-fraud via Section 75(2), you are eligible under Section 128A.
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Prepared By: Dr. Muhammed Mustafa C T, BRQ Associates – Tax & Legal Research Team, Mob: 9633 18 18 98
Disclaimer: Information compiled above is based on my understanding and review. Any suggestions to improve above information are welcome with folded hands, with appreciation in advance. All readers are requested to form their considered views based on their own study before deciding conclusively in the matter. Team BRQ ASSOCIATES & Author disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. Do not act or refrain from acting upon this information without seeking professional legal counsel.)
In case if you have any query or require more information please feel free to revert us anytime. Feedbacks are invited at brqgst@gmail.com or contact at 9633181898 or via WhatsApp at 9633181898.
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