UNDERSTANDING AMNESTY FOR WAIVER OF INTEREST / PENALTY U/S 128A OF GST LAW (Part-2)

[Dr. Sanjiv Agarwal]

Procedure & conditions for conclusion of proceedings u/s 128A

CGST Rules, 2017 have been 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 u/s 128A in respect of demands issued u/s 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.

Prescribed Forms to be used

Form No.	CGST Rules	For
GST SPL 01	Rule 164(1)	Application for waiver of interest or penalty or both under section 128A
GST SPL 02	Rule 164(2)	Application for waiver of interest or penalty or both under section 128A, in respect of an order mentioned in clause (b) or clause (c) of sub-section (1) of the said section
FORM GST SPL -03	Rule 164(8)	Notice in response to an application filed under Section 128A
FORM GST SPL-04	Rule 164(9)	Reply to notice issued under rule 164(8)
FORM GST SPL -05	Rule 164 (10)	Order for conclusion of proceedings as per section 128A
FORM GST SPL -06	Rule 164 (15)(b)(i)	Order for conclusion of proceedings as per section 128A
FORM GST SPL -07	Rule 164(12)	Order for Rejection of Application submitted under section 128A
FORM GST SPL -08	Rule 164(15)(b)(ii)	Undertaking submitted under rule 164(15)(b)(ii)

GSTN Advisory for waiver scheme under Section 128A

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 issued the following 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.