This Tax Alert summarizes the recent Notification[1] and Circular[2] issued by Central Board of Indirect Taxes and Customs (CBIC) addressing certain issues related to availment of benefit of amnesty scheme under Section 128A of the Central Goods and Services Tax Act, 2017 (CGST Act).
Section 128A and Rule 164 were inserted in the CGST Act and Rules respectively,
to provide for waiver of interest and penalty w.r.t certain tax demands
pertaining to the period from 1 July 2017 to 31 March 2020.
Earlier, Circular No. 238/32/2024-GST dated 15 October 2024 was issued by CBIC
to clarify various issues related to implementation of the said provisions.
Based on further representations concerning applicability of amnesty scheme in
cases where payments have been made through GSTR-3B instead of DRC-03, and the
consolidated demand notices or adjudication orders have been issued covering
period other than those specified under Section 128A. CBIC has clarified as
follows:
- Taxpayers who have made
payment before 1 November 2024 via GSTR-3B, prior to the issuance of
demand notice and/or adjudication order, shall also be eligible for
benefit under Section 128A. However, for those who wish to take the
benefit of the scheme after its implementation, payment must be made
through DRC-03, in accordance with Rule 164.
- If notice or order
pertains to the period partially covered under Section 128A and partially
beyond the said period, Rule 164 have been amended to allow taxpayers to
apply for the amnesty scheme after paying their tax liability for the
period covered under the scheme. They must then inform the Appellate
Authority or Tribunal of their intent to avail the benefit of Section 128A
and withdraw the appeal for the relevant period. The Appellate Authority
or Tribunal shall consider the request and issue appropriate order for the
remaining period.
However, no refund shall be
available of any tax, interest or penalty, which has already been discharged,
for the entire period covered in the notice or order, before the above
amendment.
Comments:
- The above clarification
and amendment are likely to help all affected taxpayers who wish to avail
the benefit of the amnesty scheme and close the litigation.
- Not allowing refund of
the demand already paid for the period outside the scheme in a
consolidated demand notice or adjudication order places such taxpayer at a
disadvantageous situation vis-à-vis those who would not have to pay such
demand post amendment.
[1] Notification No. 11/2025 – Central Tax dated 27 March 2025
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