AMNESTY SCHEME UNDER SECTION 128A AND GSTN ADVISORIES

[Dr. Sanjiv Agarwal]

According to notes on clauses to the Finance Bill, 2024, the objective of Section 128A in the CGST Act, 2017is to provide for a conditional waiver of interest and penalty in respect of demand notices issued under section 73 of the said Act for the Financial Years 2017-18, 2018-19 and 2019-20, except the demands notices in respect of erroneous refund. In cases where interest and penalty have already been paid in respect of any demand for the said financial years, no refund shall be admissible for the same.

Legislative Background

54th GST Council meeting recommendations

• New Rule 164 in CGST Rules, 2017, along with certain Forms, for availment of benefit to be introduced.
• Issuance of a circular to clarify various issues related to availment of waiver of interest or penalty or both as per section 128A of CGST Act.

Introduction of section 128A in Finance (No.2) Act, 2024

• Inserted in Finance (No. 2) Act, 2024 in CGST Act
• Provide for conditional waiver of interest or penalty or both, relating to demands raised under Section 73 for FY 2017-18 to FY 2019-20, in cases where the taxpayer pays the full amount of tax demanded upto 31.03.2025.
• The waiver can be availed only if the taxpayer pays the full amount of tax demanded by a specified date i.e., by 31.03.2025.
• Taxpayers who have received a notice or an order under section 73 can avail the benefit of the above scheme.
• In cases where proceedings under Section 74 initially applied but were later considered for Section 73 during appellate or court proceedings (e.g., fraud charges not being proven), the waiver can still be claimed.
• If a taxpayer has already paid interest or penalties for these periods, no refund will be allowed for amounts already settled.
• The last date for making payments will be 31st March 2025.
• Scheme may commence w.e.f. 1st November, 2024.

Waiver Scheme under Section 128A

Section 128A of contains a non-obstante clause and starts with the expression, ‘not withstanding anything to the contrary contained in this Act……….’ implying that section 128A shall have an overriding effect on all other provisions of the CGST law.

According to section 128A(1), waiver scheme is applicable to notices issued under section 73(1 or 3), order under Section 73(9), order under Section 107(11) or section 108(1) of the CGST Act, 2017. Accordingly, following situations are covered i.e., where any amount of tax is payable by a person chargeable with tax in accordance with:

1. a notice issued under section 73(1) or a statement issued under section 73(3), and where no order under section 73(9) has been issued; or
2. an order passed under section 73(9), and where no order under section 107(11) or section 108(1) has been passed; or
3. an order passed under section 107(11) or under section 108(1), and where no order under section 113(1) has been passed.

The benefit accruing under section 128A would include, inter alia,

1. No interest under Section 50 shall be payable
2. No penalty under any provision of Act shall be payable.
3. All the proceedings in respect of subject notice /statement /order shall be deemed to be concluded.

Gist of Advisories issued by GSTN

The GSTN, the common portal of GST has issued following advisories for implementation of the procedure under section 128A read with Rule 164 of CGST Rules, 2017:

1. Advisory dated 08.11.2024

• GSTN has advised that Form GST SPL-01 and Form GST SPL-02 are under development and same will be made available on the common portal, tentatively from the first week of January, 2025.
• Taxpayers have been advised to pay the tax amount demanded in the notice, statement, or order issued under Section 73 on or before March 31st, 2025, to ensure that they receive the waiver benefits by paying their taxes before the deadline.
• Taxpayer can pay the demanded tax amount through the “payment towards demand” facility in case of demand orders and through Form GST DRC-03 in case of notices.
• If payment has already been done through Form GST DRC-03 for any demand order, then taxpayer need to link the said Form GST DRC 03 with such demand order through Form GST DRC-03A, which is now available on the common portal.

2. Advisory dated 12.11.2024

• GSTN has issued an advisory for waiver scheme under Section 128A for reducing the tax disputes and to provide a relief to the taxpayers for waiver of interest and penalties in the demand notices or orders issued under Section 73 of the CGST Act, 2017 (i.e. the cases not involving fraud, suppression or wilful misstatement, etc.) for the Financial years 2017-18, 2018-19 and 2019-20.
• Rule 164 of CGST Rules, 2017 has been notified vide Notification No. 20/2024 dated. 8th October 2024, effective from 1st November, 2024 which provides procedural guidelines for the said waiver scheme.
• GSTN has advised that Form GST SPL-01 and Form GST SPL-02 are under development and same will be made available on the common portal, tentatively from the first week of January, 2025.
• Taxpayers have been advised to pay the tax amount demanded in the notice, statement, or order issued under Section 73 on or before March 31st, 2025, to ensure that they receive the waiver benefits by paying their taxes before the deadline.
• Taxpayer can pay the demanded tax amount through the “payment towards demand” facility in case of demand orders and through Form GST DRC-03 in case of notices.
• If payment has already been done through Form GST DRC-03 for any demand order, then taxpayer need to link the said Form GST DRC-03 with such demand order through Form GST DRC-03A, which is now available on the common portal.

3. Advisory dated 29.12.2024

• GSTN has issued a new Advisory on Waiver Scheme under Section 128A of the CGST Act, 2017.
• Under the Waiver Scheme, for a demand notice or statement or order which has been issued under Section 73 for the tax periods between July 2017 & March 2020, the taxpayers are required to file an application either in Form GST SPL-01 or Form GST SPL-02 in GST portal accordingly.
• While Form GST SPL-01 is expected to be made available in due course, Form GST SPL-02 is presently available on the GSTN portal.
• GSTN has provided a detailed procedure for filing Form GST SPL-02 electronically.
• It contains details about how to fill application, navigation, payment, up loading of supporting documents and submissions of application.
• Taxpayers can seek guidance from:

https://tutorial.gst.gov.in/downloads/news/help_document_on_filing_of_spl_02.pdf

4. Advisory dated 14.01.2025

With reference to GSTN’s earlier advisory issued by GSTN on 29.12.2024, GSTN has advised that:

• Both Form GST SPL-01 and Form GST SPL-02 are available in the GST portal and the taxpayers can file applications under waiver scheme.
• One of the eligible conditions for filing application under waiver scheme is to withdraw the appeal applications filed against the demand order/notice/statement for which waiver application is to be submitted.
• For the appeal applications (APL 01) filed before First Appellate authority, withdrawal option is already available in the GST portal.
• For the appeal applications (APL 01) filed before 21.03.2023, withdrawal option is not available in GST portal. For such cases, the taxpayers are advised to submit their request for withdrawal of appeal applications to the concerned Appellate Authority. The Appellate authority will forward such requests to GSTN through State Nodal officer for withdrawal of such appeal applications (i.e. filed before 21.03.2023 and not disposed off) from backend.
• Taxpayers can report difficulties to https://selfservice.gstsystem.in by raising a ticket under category “Issues related to Waiver Scheme”.

5. Advisory dated 14.05.2025

• GSTN has issued an advisory on Appeal withdrawal with respect to Waiver scheme under section 128A of CGST Act, 2017
• Waiver scheme under Section 128A mandates that any appeal against the requisite demand order should not remain pending with Appellate authority.
• In the GST system, when Appeal Withdrawal Application (APL 01W) for appeal is filed before issuance of final acknowledgment (APL 02) by the Appellate authority, then the system automatically withdraws the Appeal Application (APL 01). In such cases, the status of the appeal application will automatically change from “Appeal submitted” to “Appeal withdrawn”.
• However, if withdrawal application is filed after issuance of final acknowledgment, then the withdrawal of such appeal is subjected to the approval of the Appellate authority. Once the Appellate authority approves the withdrawal application, the status of the Appeal application changes from “Appeal submitted” to “Appeal withdrawn”.
• In both the above-mentioned cases, the status of the Appeal application is changed to “Appeal Withdrawn” which essentially fulfilled the requirement.
• It is advised by GSTN that while filing waiver application or in the already filed waiver application, taxpayers need to upload the screenshot of the appeal case folder showing status as “Appeal withdrawn”.