GST Amnesty Scheme: Key Updates & Rule 164 Amendments Under Notification No. 11/2025

The GST Amnesty Scheme under Section 128A of the CGST Act is a much-needed relief for taxpayers facing outstanding tax demands. Introduced to encourage compliance and resolve disputes, this scheme waives interest and penalties for specific tax liabilities related to non-fraudulent cases between July 1, 2017, and March 31, 2020. Eligible taxpayers must pay their outstanding tax by March 31, 2025, and apply by June 30, 2025, to avail of the waiver.

CBIC has issued Notification No. 11/2025-Central Tax on 27^th March 2025 bringing some important amendments to rule 164 which governs procedure and conditions for closure of proceedings under section 128A.

Let's understand the details!

Notification No. 11/2025-Central Tax dated 27^th March 2025

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS

New Delhi: 27.03.2025

Notification No. 11/2025-Central Tax

G.S.R... (E).- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely: -

1. (1) These rules may be called the Central Goods and Services Tax (Second Amendment) Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Central Goods and Services Tax Rules, 2017, -

(a) In rule 164, -

(i) In sub-rule (4), after the words "after payment of the full amount of tax", the words "related to the period mentioned in the said sub-section and" shall be inserted.

(ii) After sub-rule (4), the following Explanation shall be inserted, namely: -

"Explanation, - No refund shall be available for any tax, interest, and penalty, which has already been discharged for the entire period, before the commencement of the Central Goods and Services Tax (Second Amendment) Rules, 2025, in cases where a notice or statement or order mentioned in sub-section (1) of section 128A, includes a demand of tax, partially for the period mentioned in the said sub-section and partially for a period other than mentioned in the said sub-section.".

(b) In rule 164, in sub-rule 7, after the first proviso, the following proviso shall be inserted, namely: -

"Provided further that where the notice or statement or order mentioned in sub-section(1) of section 128A of the Act includes the 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, 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 sub-clause (3) of section 128A."

[No. CBIC-20016/12/2025-GST]

(Raushan Kumar)

Under Secretary to the Government of India.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S.R. 610(E), dated, 19th June 2017, and was last amended, vide number G.S.R. 72(E), dated the 23rd January, 2025.

Key highlights of the Notification

• Rule 164 of the Central Goods and Services Tax (CGST) Rules, 2017 deals with procedure and conditions for closure of proceedings under section 128A in respect of demands issued under section 73. 
• It’s Sub-rule 4 states that where the notice or statement or order mentioned in sub-section (1) of section 128A includes the 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 for waiver of interest/penalty can be filed only after payment of the full amount of tax. Words “related to the period mentioned in the said sub-section” are added to it to clarify that tax amount relating to the specified period (i.e. period eligible under Section 128A July 1, 2017 – March 31, 2020) shall be paid to qualify for a waiver application.
• After sub-rule (4), the following Explanation shall be inserted, namely: 

‍

"Explanation, - No refund shall be available for any tax, interest, and penalty, which has already been discharged for the entire period, prior to the commencement of the Central Goods and Services Tax (Second Amendment) Rules, 2025, in cases where a notice or statement or order mentioned in sub-section (1) of section 128A, includes a demand of tax, partially for the period mentioned in the said sub-section and partially for a period other than mentioned in the said sub-section.".

‍

This amendment clarifies that no refund will be given for any tax, interest, or penalty already paid before the CGST (Second Amendment) Rules, 2025 took effect. This applies if a tax demand covers both eligible and ineligible periods under Section 128A(1).

• Sub-rule 7 of Rule 164 states that The application of waiver 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. A new second proviso is added to the said sub-rule as follows:

"Provided further that where the notice or statement or order mentioned in sub-section(1) of section 128A of the Act includes the 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, 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 sub-clause (3) of section 128A.”

It clarifies that if a tax demand includes both eligible (under Section 128A) and ineligible periods, the taxpayer is not required to withdraw the entire appeal. Instead, they can notify the Appellate Authority or Tribunal of their intention to withdraw the appeal for the eligible period. The authority will then issue an order only for the period beyond FY 2017-18 to 2019-20. Additionally, as per Section 128A(3), the appeal will be deemed withdrawn for the period July 1, 2017 – March 31, 2020.

Conclusion

The amendments introduced through Notification No. 11/2025-Central Tax provide much-needed clarity on the implementation of the GST Amnesty Scheme under Section 128A. By refining Rule 164, the government has streamlined the process for taxpayers to avail of the waiver on interest and penalties, ensuring that only the specified period (July 1, 2017 – March 31, 2020) is considered for relief. The updates also remove ambiguities regarding refund eligibility and appeal withdrawal requirements, making it easier for businesses to comply with the scheme. Given the strict deadlines and procedural requirements, taxpayers should assess their eligibility promptly and take necessary action to maximize the benefits of this amnesty.

‍