Unlocking Tax Relief

Your Guide to Navigating the GST Interest and Penalty Waiver Scheme

The Goods and Services Tax (GST) landscape in India has introduced a significant relief measure for taxpayers—the GST Interest and Penalty Waiver Scheme under Section 128A of the CGST Act, 2017. This initiative aims to alleviate the financial burden of interest and penalties for specific tax periods, provided certain conditions are met.

Understanding Section 128A

Section 128A, introduced through the Finance (No. 2) Act, 2024, offers taxpayers the opportunity to waive interest and penalties associated with GST demands raised under Section 73 for the financial years 2017-18, 2018-19, and 2019-20. It's important to note that this waiver does not apply to cases involving erroneous refunds or demands raised under Section 74.

Eligibility Criteria

To qualify for the waiver:

• Applicable Periods: The scheme covers tax periods from July 1, 2017, to March 31, 2020.
• Full Tax Payment: Taxpayers must pay the full amount of tax demanded by March 31, 2025.
• Exclusions: Cases involving fraud, suppression, willful misstatement, or erroneous refunds are not eligible.

Application Process

The procedure involves:

1. Form Submission:
2. Deadlines:
3. Payment Methods:

Procedural Guidelines

Rule 164 of the CGST Rules, 2017, introduced through Notification No. 20/2024 dated October 8, 2024, effective November 1, 2024, outlines the procedural guidelines for availing this scheme. Taxpayers are advised to adhere strictly to these procedures to ensure successful application.

Key Considerations

• Multiple Notices: Separate applications are required for each notice, statement, or order.
• Pending Appeals: The waiver is not applicable if an appeal or writ petition is pending and not withdrawn.
• Erroneous Refunds: Demands related to erroneous refunds are excluded from this waiver.

Conclusion

The GST Interest and Penalty Waiver Scheme under Section 128A presents a valuable opportunity for taxpayers to mitigate financial liabilities arising from past tax periods. By understanding the eligibility criteria, adhering to the application process, and meeting the stipulated deadlines, taxpayers can effectively navigate this scheme and achieve compliance with reduced financial strain.

For detailed procedural guidelines and access to the necessary forms, taxpayers should refer to the official GST portal and consult the relevant notifications and circulars issued by the Central Board of Indirect Taxes and Customs (CBIC).