Understanding the GST Amnesty Scheme: Relief for Taxpayers Under Section 128A.

Background

The initial years of GST implementation, since its introduction in July 2017, were far from smooth. Businesses faced numerous challenges, including:

• Technical glitches in the GST Network (GSTN)

• Lack of clarity on certain legal provisions

• Delayed rollout of key modules in the GSTN

These issues led to an increase in litigation and compliance difficulties for taxpayers. To address these concerns and encourage voluntary compliance, the GST Council, in its 53rd meeting held on June 22, 2024, introduced the GST Amnesty Scheme. This scheme, along with Section 128A and Rule 164, aims to reduce the burden of interest and penalties for specific tax demands.

GST Amnesty Scheme: A Step-by-Step Preparation Guide Before You Apply

1. Eligibility Criteria

Taxpayers can avail themselves of the scheme if they fall under any of the following categories:

1. Received a notice under Section 73(1) or a statement under Section 73(3) for FY 2017-18, 2018-19, or 2019-20, but have not yet received an order under Section 73(9).

2. Received an order under Section 73(9) but have not received subsequent orders under Section 107(11) or Section 108(1).

3. Received an order under Section 107(11) or Section 108(1) and are awaiting a final decision under Section 113(1).

2. Conditions for Waiver

To avail of the waiver of interest and penalties, taxpayers must:

1. Pay the full tax demand (as per the notice/order) on or before March 31, 2025.
2. If the case was initially treated under Section 74(1) but later reclassified under Section 73 by an appellate authority or court, the full tax amount must be paid within six months from the redetermination order.

3. Exclusions

The scheme does not apply in the following cases:

1. Erroneous refunds – If the demand pertains to the repayment of an incorrectly granted refund, the waiver is not applicable.

2. Pending appeals or writ petitions – If a taxpayer has filed an appeal or writ petition that is still pending and has not been withdrawn before the specified date, they cannot avail of the scheme.

Checklist Before Applying for the GST Amnesty Scheme

To ensure a smooth and successful application, taxpayers should complete the following checklist:

 1. Eligibility Check

1. The tax demand pertains to FY 2017-18, 2018-19, or 2019-20.
2. The demand was raised under Section 73 (not Section 74).
3. No order has been passed under Section 73(9), OR the order is pending under Section 107(11) or Section 108(1).
4. If initially classified under Section 74(1) but later converted to Section 73, ensure eligibility under the revised order.
5. The demand does not relate to erroneous refunds.

2. Payment Requirements

1. Ensure full tax payment as per the notice/order is made before March 31, 2025.
2. If reclassified from Section 74 to Section 73, make the full payment within six months from the order date.
3. Maintain valid proof of payment for submission.

3. Legal Compliance

1. If an appeal or writ petition is pending, ensure it is withdrawn before applying for the scheme.
2. Obtain proof of withdrawal of the appeal (if applicable).

4. Documentation

1. Prepare a copy of the GST demand notice/order issued under Section 73.
2. Gather payment receipts for the deposited tax amount.
3. Obtain any additional supporting documents required for compliance.

5. Application Filing

1. Submit the application electronically in Form GST SPL-01 or GST SPL-02, as applicable.
2. Ensure the application is filed within three months from March 31, 2025.
3. Double-check all details before submission to avoid rejection or delays.

Final Thoughts

The GST Amnesty Scheme under Section 128A provides a valuable opportunity for businesses to settle past tax disputes without additional penalties or interest. By following the eligibility criteria, fulfilling payment conditions, and ensuring proper documentation, taxpayers can maximize the benefits of this scheme while achieving compliance with the GST law.

Act Now! The deadline for availing of this scheme is March 31, 2025, take advantage of this window to resolve past tax issues hassle-free.

CA. Shreeharsha

GST Litigation Expert

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