GST Advisory for waiver scheme u/s 128A!

The Goods and Services Tax (GST) framework in India has undergone numerous reforms since its inception, to simplify tax compliance and improve transparency. After the budget was declared on 23^rd July 2024, Finance (No. 2) Act, 2024 was published on 16^th August 2024. Along with many other changes, a new section 128A is inserted in the CGST Act, 2017. This section covers waiver of interest or penalty or both relating to demands raised under section 73, for certain tax periods.

Now, the GSTN has issued an advisory about the waiver scheme under section 128A of the CGST Act, 2017. 

Let’s understand the changes!

GST ADVISORY dated 8^th Nov,2024

ADVISORY FOR WAIVER SCHEME UNDER SECTION 128A

Nov 8th, 2024

To reduce the tax disputes and to provide a big relief to the taxpayers, the GST Council in its 53rd meeting held on 22nd June 2024 recommended 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. To avail of this waiver, the condition is that the full tax demanded is paid on or before 31.03.2025.

Given the above, Rule 164 of CGST rules, 2017 was notified through Notification No. 20/2024 dated. 8th October 2024, effective from 1st November 2024. This rule provides procedural guidelines for the said waiver scheme. As per the waiver scheme, if a notice or order is issued under Section 73 for the financial years 2017-18, 2018-19, and 2019-20, the taxpayers are required to apply FORM GST SPL-01 or FORM GST SPL-02, respectively on the common portal within three months from notified date, which is 31.03.2025.

In this regard, it is to inform you that Form GST SPL-01 and Form GST SPL-02 are under development and the same will be made available on the common portal tentatively from the first week of January 2025. In the meantime, taxpayers are 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.

Taxpayers 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. However, if payment has already been done through Form GST DRC-03 for any demand order then the taxpayer needs 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.

Thanking You,
Team GSTN

Key Highlights of the Advisory

• This waiver scheme u/s 128A is applicable for the Financial years 2017-18, 2018-19 and 2019-20.
• To avail of this waiver, the condition is that the full tax demanded is paid on or before 31.03.2025.
• As per the waiver scheme, if a notice or order is issued under Section 73 for the financial years 2017-18, 2018-19, and 2019-20, the taxpayers are required to apply FORM GST SPL-01 or FORM GST SPL-02, respectively on the common portal within three months from notified date, which is 31.03.2025.
• These forms will be available on the common portal tentatively from the first week of January 2025.
• In the meantime, taxpayers 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. However, if payment has already been done through Form GST DRC-03 for any demand order then the taxpayer needs 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.

Conclusion

The GST waiver scheme under Section 128A offers taxpayers a unique opportunity to resolve tax disputes for the financial years 2017-18, 2018-19, and 2019-20 without the additional burden of interest and penalties, provided the full tax demand is paid by March 31, 2025. By adhering to the procedural guidelines, including timely payment and the submission of the necessary applications through FORM GST SPL-01 or FORM GST SPL-02, taxpayers can avail themselves of this significant relief.

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