GST Amnesty 2024: Waiver of Interest and Penalties Under Section 128A

The Goods and Services Tax (GST) Amnesty Scheme 2024, governed by Section 128A of the CGST Act, 2017, and Rule 164, offers taxpayers an opportunity to seek relief from interest and penalties for specific tax defaults. This initiative provides a structured process for closing proceedings related to tax obligations from July 1, 2017, to March 31, 2020. Here’s a comprehensive guide to understanding its provisions, eligibility criteria, application process, and benefits.

What is the GST Amnesty Scheme 2024?

The scheme, introduced via Section 146 of the Finance (No. 2) Act, 2024, and notified under Notification No. 20/2024 – Central Tax (October 8, 2024), facilitates the waiver of interest and penalties for eligible taxpayers. It aims to support those who inadvertently defaulted on tax obligations during the specified period, helping them resolve issues and comply without excessive financial burden.

Key Provisions of Section 128A and Rule 164

1. Eligibility for Waiver

Taxpayers eligible for a waiver under Section 128A include those who have:

  • Notices or Statements (Sec 128A(1)(a)): Received a notice or statement under Section 73(1) of the CGST Act for the specified period.
  • Orders (Sec 128A(1)(b) & (c)): Received:
    • Orders from a Proper Officer under Section 73(9),
    • Orders from an Appellate Authority under Section 107(11), or
    • Orders from a Revisional Authority under Section 108, for the specified period.

2. Application Process

Eligible taxpayers must apply using designated forms:

  • Form GST SPL-01: For notices or statements under Sec 128A(1)(a), applications must be submitted within three months of the notified payment date (March 31, 2025), making the deadline June 30, 2025.
  • Form GST SPL-02: For orders under Sec 128A(1)(b) or (c), applications must be filed within three months of the notified payment date, with an exception allowing six months in certain cases.

3. Payment Requirements

  • Full Tax Payment: Applicants must settle all tax dues, excluding amounts related to Input Tax Credit (ITC) disallowance under Sections 16(5) and 16(6).
  • Payment Mode: Payments must be made through Form DRC-03, or Form DRC-03A if already filed before the order was passed.

4. Time Limits

  • General Time Limit: Applications are to be filed within three months of the notified date under Sec 128A(1)(a).
  • Exception: For cases falling under the first proviso to Sec 128A(1), applications may be filed within six months from the order communication date.

5. Documentation

Applicants must submit evidence of withdrawing appeals or petitions filed with appellate authorities, tribunals, or courts.

Processing and Approval

1. Application Review

  • Notice (GST SPL-03): If ineligible, a notice may be issued within three months of receiving the application.
  • Applicant’s Reply (GST SPL-04): Applicants must respond to notices within one month.

2. Orders

  • Approval (GST SPL-05): If eligible, the waiver is granted.
  • Rejection (GST SPL-07): If rejected, the applicant may appeal or restore the original appeal.

3. Deemed Approval

If no order is issued within:

  • Three months of application submission (if no notice is served), or
  • Four months from notice issuance (if no reply is provided),
    the waiver application is considered approved.

Appeals and Restorations

If a waiver is rejected:

  • Restoration of Appeals: Withdrawn appeals are reinstated if no further appeal is filed.
  • Filing an Appeal: Rejected orders can be contested. Upon approval, the waiver is granted via Form GST SPL-06.

Voiding of Waiver

The waiver stands void if:

  1. Additional tax dues are not paid.
  2. Interest or penalties are not cleared within three months of the order.

Read More: A Guide to Income Tax Scrutiny Assessments Under Section 143(3)

The GST Amnesty Scheme 2024 offers a golden opportunity for taxpayers to rectify past defaults and comply without the heavy burden of penalties and interest. By simplifying procedures and providing structured timelines, the scheme facilitates compliance while promoting goodwill among taxpayers.

Taxpayers are encouraged to act promptly, adhere to deadlines, and consult professionals to ensure their applications are accurate and complete.

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