Amnesty Scheme for Demand Issued u/s 73 of CGST Act for FY 2017-18 to 2019-20| Manner of Filing Application and Payment of Tax

Because in the initial period of Implementation of GST, the taxpayer has made various genuine mistakes while filing the return and while making payment of tax, the 53rd GST Council meeting announced an amnesty scheme, i.e., waiver of interest and penalty, for Notice or statement or order issued under Section 73 of CGST Act for the period of 2017-18 to 2019-20.

Provisions related to the amnesty scheme are inserted through Section 128A of the CGST Act, 2017. The CBIC received various doubts from the industry about the implementation of Section 128A of the CGST Act. In order to clarify the issue and to ensure uniformity in the implementation of the provisions, clarification is issued through Circular No. Circular No. 238/32/2024-GST dated 15th October, 2024.

This article discusses the manner of filing an application under Section 128A and the manner of payment of tax.

1. Section 128A of CGST Act, 2014

• As per recommendations of the 53rd GST Council meeting, Section 128A has been inserted in the CGST Act with effect from 01.11.2024.
• The Section provides for waiver of interest and penalty for the demands under section 73 of the CGST Act pertaining to FY 2017-18, 2018-19, and 2019-20.
• The provisions of Section 128A shall become applicable from 1st November 2024.
• Further, Rule 164 has been inserted in CGST Rules vide notification No.20/2024- Central tax dated 8th October 2024. Rule 164 provides for procedures and conditions for the closure of proceedings under section 128A of the CGST Act.
• For the purpose of claiming benefit under Section 128A, the taxpayer is required to make full payment of tax demanded in notice/ statement/ order before 31st March 2025.

2. Cases where the application can be filed under Section 128A

• Provisions of Section 128A shall apply in cases where notices/ statements have been issued under Section 73, for the FYs 2017-18, 2018-19, and 2019-20, in the following situations:
  • Where a notice or statement is issued under section 73(1) or 73(3) but where no order is issued under section 73(9);
  • Where an order has been issued under section 73(9) but no order has been issued by the Appellate Authority/ Revisional Authority;
  • Where an order has been issued by the Appellate Authority/ Revisional Authority to notice/ statement issued under section 73 and where no order has been passed by the Appellate Tribunal.

• Further, application under section 128A(1) can also apply in the cases where notice or statement is initially issued under section 74 but the proper officer is required to pass an order under section 73 as per directions of Appellate Authority or Appellate Tribunal or a court.

3. Process of Filing application under Section 128A

3.1 Form in which application is required to be filed:

• The taxpayer shall apply section 128A in the following forms on the GST portal in different situations:

• If more than one notice or statement or order is issued under section 73 of the CGST Act from July 2017 to March 2020 then a separate application is required to be filed for each notice/ statement or order.

3.2 time for filing an application under section 128A

• The application in FORM GST SPL-01 or FORM GST SPL-02 shall be filed within 3 months from 31.03.2025.
• In case where notice is issued under section 74 but an order is required to be issued under section 73, the application shall be filed in FORM GST SPL-02 within 6 months from the date of communication of the order issued under section 73. 

3.3 Withdrawal of appeal or Writ Petition

• Where an appeal has been filed by the taxpayer, against an order referred to in Section 128A(1)(b) or (c), or where a writ petition has been filed by the taxpayer against a notice/ statement/ order referred to Section 128A(1)(a) or (b) or (c) then the taxpayer is required to withdraw the same before filing an application under Section 128A(1).
• The order of withdrawal of such appeal/ writ petition is required to file along with the application filed in FORM GST SPL-01 or FORM GST SPL-02.
• Where the taxpayer has filed the application for withdrawal of appeal or writ petition before Appellate Authority or Appellate Tribunal or a court but the order for withdrawal has not been issued by the concerned authority till the date of filing of the application in FORM GST SPL-01 or FORM GST SPL-02 then the taxpayer is required to upload the copy of such application or the document filed for withdrawal alongwith Form GST SPL-01 or GST SPL-02.
• The taxpayer shall upload the final order of withdrawal on GST portal within 1 month from the of the issuance of the such withdrawal order.

4. Payment of tax under Section 128A

4.1 Manner of Payment of Tax:

The taxpayer is required to make of payment of tax in pursuance of Section 128A in following manner:

a. Section 128A(1)(a), i.e., Notice or statement is issued under section 73 but final order is not issued: Tax demanded in notice shall be paid through GST DRC-03.

b. Section 128A(1)(b) or (c), i.e., Order is issued under section 73 but matter is pending with Appellate Authority or Revisional Authority or Appellate Tribunal::

• payment towards tax demanded shall be made by making the payment against the debit entry created in the Part II of the Electronic Liability Register (ELR) by the demand order in the manner provided in Circular No. 224/18/2024 -GST dated 11th July 2024.
• However, if payment is already made through GST DRC-03 then the taxpayer shall follow the procedure prescribed in rule 142(2B). The taxpayer shall file an application in FORM GST DRC-03A in order to adjust the amount already paid vide the FORM GST DRC-03, towards the demand created in the ELR-Part II, before filing the application for waiver under Section 128A in FORM GST SPL-02. 
• Date of payment shall be considered as the date on which the amount has been paid through FORM GST DRC-03 and not the date on which the said amount has been adjusted using FORM GST DRC-03A.

4.2 Other points to be considered:

• Such payment shall be made on or before 31st March, 2025.
• In case notice is issued under section 74 and order is issued under section 73, tax payment shall be made within 6 months of the communication of the order issued under section 73
• The applicant can file the application for waiver of interest or penalty only after payment of full amount of tax demanded in the notice/ statement/ order including demand pertaining to erroneous refund, if any.
• If issued notice or order included a period other than July 2017- March 2020 (i.e., in addition to the period of July, 2017 – March, 2020) then the taxpayer is required to pay demand pertaining to such additional period as well before filing application.

4.3 Tax no more payable due to Section 16(5) or (6) of CGST Act

• In case the amount of tax payable as per the notice/ statement/ order includes the amount that was demanded due to contravention of provisions of Section 16(4). However, such amount is not more payable due to the retrospective insertion of Section 16(5) or (6) then the full amount of tax payable as per the notice/ statement/ order shall be calculated after deducting the amount which is not payable as per Section 16(5) or (6) of CGST Act.
• While computing the amount deductible on account of Section 16(5) or (6), the taxpayer has to ensure that the amount is deducted only where ITC has been denied solely on account of Section 16(4) of the CGST Act and not on any other grounds. 
• The tax officer scrutinizing such applications is also required to verify such computation.