Essential Insights on the Waiver of Interest and Penalty Under Section 128A of the CGST Act

The introduction of Section 128A in the CGST Act, 2017, is a breath of fresh air for taxpayers. It not only simplifies tax compliance but also addresses long-standing disputes under the Goods and Services Tax (GST) framework. This provision allows taxpayers to waive interest and penalties on specific tax demands for the financial years 2017-18, 2018-19, and 2019-20. Let’s explore what this means and how it can benefit taxpayers like you.

The GST Amnesty Scheme in a Nutshell

In 2024, the GST framework got a much-needed upgrade with the introduction of Section 128A to the CGST Act, 2017. This section offers relief by waiving interest and penalties on tax demands raised under Section 73, provided taxpayers pay the full tax amount within the set deadlines. The aim? To reduce disputes, ease taxpayer stress, and promote timely payments.

Here’s the gist:

• Applicable to tax periods from July 1, 2017, to March 31, 2020.
• Requires taxpayers to have no ongoing appeals, write petitions, or erroneous refunds.
• Full payment of taxes must be completed within prescribed deadlines.

Key Milestones: A Quick Overview

1. The Introduction of Section 128A

The Finance (No. 2) Act, 2024, published on August 16, 2024, brought Section 128A into the CGST Act. Here’s what it entails:

• Waivers on interest and penalties for tax demands raised under Section 73.
• Covers tax periods from FY 2017-18 to FY 2019-20.
• Eligibility requires no pending legal disputes or incorrect refunds.

2. Payment Deadlines You Should Know

Notification No. 21/2024, issued on October 8, 2024, clarified payment deadlines:

• For notices, statements, or orders under Section 128A(a), (b), or (c): Payment due by March 31, 2025.
• For cases requiring tax redetermination under Section 73: Payment due six months from the issuance of the redetermination order.

3. Guidelines for Implementation

GST Circular No. 238/32/2024, issued on October 15, 2024, laid down the procedural roadmap:

• Applications must be filed using FORM GST SPL-01 or GST SPL-02 on the GST portal.
• Proper officers will approve waivers via FORM GST SPL-05 or reject applications using FORM GST SPL-07.
• Rejected applications can be contested through the appeals process.

4. The Roadmap for Taxpayers

An advisory from GSTN on November 8, 2024, outlined the procedural aspects:

• Taxpayers must file the required forms within three months of the notified date (March 31, 2025).
• Forms will be available on the GST portal starting January 2025.
• Payments can be made using the “payment towards demand” facility or FORM GST DRC-03. Already paid? Link your payment to the demand order using FORM GST DRC-03A.

How to Benefit from the Amnesty Scheme

Here’s your step-by-step guide:

1. Clear your outstanding tax liabilities by the prescribed deadlines.
2. Submit the necessary forms (GST SPL-01 or GST SPL-02) on the GST portal.
3. If your waiver application is rejected, don’t lose heart—appeal the decision.

Why This Matters

Section 128A offers a golden opportunity to resolve tax disputes and avoid hefty interest and penalties. It’s designed to make tax compliance less stressful and more accessible. But time is of the essence! The deadline to act is March 31, 2025, so take the necessary steps now to avoid missing out.

Let’s Make Tax Compliance Simple

Have questions or need help navigating the GST Amnesty Scheme? Let’s collaborate and simplify tax compliance together. Drop your thoughts or reach out—let’s demystify GST one step at a time!

?? Reach out to us at TaxoSmart

?? Contact us today!

?? Visit: www.taxosmart.com

?? Email: [email protected]

Join TaxoSmart today!

#GSTAmnestyScheme #Section128A #TaxCompliance #GSTUpdates #TaxRelief #FinanceForStartups #CGSTAct2017 #TaxSavings #GovernmentPolicies