GST AMNESTY / WAIVER SCHEME: LAW AND CONDITIONS (FINAL PART)

[Dr. Sanjiv Agarwal]

Procedure & conditions for conclusion of proceedings under Section 128A (Rule 164)

CGST Rules, 2017 was amended w.e.f. 01.11.2024 vide Notification No. 21/2024-CT dated 08.10.2024 and a new Rule 164 has been inserted to prescribe procedure and conditions for closure of proceedings under Section 128A in respect of demands issued under Section 73 of the CGST Act, 2017.

Accordingly,

1. Any eligible person can file an application electronically in Form GST SPL-01 on common portal along with details of notice / statement and details of payment of tax made through Form GST DRC-03.
2. Any eligible person, in respect of orders, can file application electronically in Form GST SPL-02 on common portal along with details of order and payment.
3. The payment towards demanded shall be made only by crediting the amount in the electronic liability register against the debit entry created by the said order.
4. If the payment towards tax demanded has been made through FORM GST DRC-03, an application in FORM GST DRC-03A, as per sub-rule (2B) of rule 142, shall be filed by the said person for credit of the said amount in the Electronic Liability Register against the debit entry created for the said demand, before filing the application in Form GST SPL-02.
5. Where the notice or statement or order mentioned in section 128A(1) includes demand of tax, partially on account of erroneous refund and partially for other reasons, an application may be filed only after payment of the full amount of tax demanded in the said notice or statement or order, on or before the date notified.
6. Where the notice or statement or order includes demand of tax, partially for the period covered and partially for the period other than that mentioned, an application may be filed only after payment of the full amount of tax demanded in the said notice or statement or order, on or before the date notified.
7. The amount payable shall be the amount that remains payable, after deducting the amount not payable in accordance with section 16(5, 6), from the amount payable in terms of the notice or statement or order under section 73, as the case may be.
8. Application can be filed within a period of three months from date as per section 128A(1) (From 31.03.2025).
9. For orders of re-determination issued under section 73, time limit will be six months from the date of communication of order.
10. Application shall be accompanied by documents evidencing withdrawal of appeal or writ petition, if any, filed before any Appellate Authority, or Tribunal or Court, as the case may be, to establish that the applicant is eligible for the waiver of interest or penalty or both, in terms of section 128A.
11. Applicant shall upload copy of application for withdrawal of appeal / writ petition along with application and also upload copy of order of withdrawal within one month of such order of withdrawal.
12. Where proper officer is of the opinion tax application in Form GST SPL-01 or SPL-02 is liable to be rejected, not being eligible,he shall issue a notice on the common portal to the applicant in FORM GST SPL-03 within three months from the date of receipt of the said application and shall also give the applicant an opportunity of being heard.
13. On receiving the notice the applicant may file a reply to the said notice on the common portal in FORM GST SPL-04, within a period of one month from the date of receipt of the notice.
14. If the proper officer is satisfied that the applicant is eligible for waiver of interest and penalty as per section 128A, he shall issue an order in FORM GST SPL-05 on the common portal accepting the said application and concluding the proceedings under section 128A.
15. In cases where the order in FORM GST SPL-05 is issued by the proper officer under sub-rule 164 (10):

(a) in respect of an application filed in FORM GST SPL-01 pertaining to a notice or statement referred to in section 128A(1)(a), the summary of order in FORM GST DRC-07 as per rule 142(5) shall not be required to be issued by the proper officer, in respect of the said notice or statement;

(b) in respect of an application filed in FORM GST SPL-02 pertaining to an order referred to in section 128A(1)(b, c), the liability created in the part II of Electronic Liability Register, shall be modified accordingly.

16. If the proper officer is not satisfied with the reply of the applicant, the proper officer shall issue an order in FORM GST SPL-07 rejecting the said application.
17. In cases where notice in FORM GST SPL-03 has not been issued, the proper officer shall issue the order under sub-rule (10) within a period of three months from the date of receipt of the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be.
18. Where Form GST SPL-03 has been issued order shall be issued within a period of three months from the date of receipt of reply of the applicant in FORM GST SPL-04, or within a period of four months from the date of issuance of notice in FORM GST SPL-03 where no reply is received from the applicant.
19. If no order is issued within the stipulated time, then the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be, shall be deemed to be approved and the proceedings shall be deemed to be concluded.
20. In cases where no appeal is filed against the order in FORM GST SPL-07 within the time period specified in section 107(1), the original appeal, if any, filed by the applicant against the order mentioned in section 128A(1)(b, c) and withdrawn for filing the application in FORM GST SPL-02 in accordance with section 128A(3), shall be restored.
21. In cases where an appeal is filed against the order in FORM GST SPL-07 for rejection of application for waiver of interest, or penalty, or both, if—

(i) the appellate authority has held that the proper officer has wrongly rejected the application for waiver of interest, or penalty, or both, in FORM GST SPL-07, the said appellate authority shall pass an order in FORM GST SPL-06 on the common portal accepting the said application and concluding the proceedings under section 128A; or

(ii) the appellate authority has held that the proper officer has rightly rejected the application for waiver of interest, or penalty, or both, in FORM GST SPL-07, the original appeal, if any, filed by the applicant against the order mentioned in section 128A(1)(b, c) and withdrawn for filing the application in FORM GST SPL-02 in accordance with section 128A(3), shall be restored, subject to condition that the applicant files an undertaking electronically on the portal in FORM GST SPL-08, within a period of three months from the date of issuance of the order by the appellate authority in FORM GST APL-04, that he has neither filed nor intends to file any appeal against the said order of the Appellate Authority.

22. In cases where the taxpayer is required to pay an additional amount of tax liability as per the second proviso to section 128A(1), and such additional payment is not made within the time limit specified in the said proviso, the waiver of interest, or penalty, or both, under the said section as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, if any, shall become void.
23. In cases where the taxpayer is required to pay any amount of interest, or penalty, or both, in respect of any demand pertaining to erroneous refund or on account of demand pertaining to the period other than the period mentioned in section 128A(1), and the details of such amount have been mentioned in FORM GST SPL-05 or FORM GST SPL-06, the applicant shall pay the said amount of interest, or penalty, or both, within a period of three months from the date of issuance of the order in FORM GST SPL-05 or FORM GST SPL-06, as the case may be, and where the said amount is not paid within the said time period, the waiver of interest, or penalty, or both, under section 128A as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, shall become void.

Due date for tax payment under Section 128A

The Central Government vide Notification No. 21/2024-CT dated 08.10.2024 notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the CGST Act, 2017. If a notice was initially issued under Section 74 but later found unsustainable under that section, benefit under Section 128A is available if payment is made within 6 months of order date for re-determining tax under Section 73.

Following dates have been provided:

• • • • Registered persons to whom a notice or statement or order, has been issued under section 128A: 31.03.2025
      • Registered persons to whom a notice has been issued under  section 74(1), in respect of the period referred to in section 128A , 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 section 75(2), for determination of the tax payable by such person, deeming as if the notice were issued under section 73(1) : Date ending on completion of six months from the date of issuance of the order by the proper officer re determining tax under section 73 of the CGST Act, 2017.

This shall be applicable from 01.11.2024.

Waiver Scheme for Interest

CBIC had clarified vide Circular No. 238/32/2024-GST dated 15.10.2024 in respect of applicability of scheme where tax has been paid but section 73 notice or order pertains only to interest and penalty. According to para 4, it has been clarified that:

“Where the tax due has already been paid and the notice or demand orders under Section 73 only pertains to interest and/or penalty involved, the same shall be considered for availing the benefit of section 128A.

However, the 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.

Section 128A (1) clearly provides that the waiver of interest or penalty or both is only applicable when the full amount of tax demanded in the notice/ statement/ order is paid. Partial waiver is not allowed.”

Thus, if the amount of interest does not relate to any demand of tax dues, it can not be recovered under section 73 by issuance of notice. As per CBIC clarification, where the tax due has already been paid and the notice or demand orders under Section 73 only pertains to interest and / or penalty involved, the same shall be considered for availing the benefit of section 128A. Thus, notices or orders for interest and / or penalty only can also be covered for the benefit of waiver.