The GST Amnesty Scheme was introduced by the government to provide relief to taxpayers who missed filing GSTR-3B for the previous tax periods.The introduction of GST in July 2017 marked a significant shift in India’s indirect tax system. The initial implementation phase was characterized by a wave of notifications and sudden changes, challenging taxpayers and tax professionals across the country. Despite the rapid adaptation, errors and technical glitches were inevitable during this transition period. Recognizing these challenges, the 53rd GST Council Meeting proposed a conditional waiver of interest and/or penalty for the initial years of GST implementation (FY 2017-18 to FY 2019-20).
What is Meant by the GST Amnesty Scheme?
The GST Amnesty Scheme was first notified to cover periods from July 2017 up to September 2018. A one-time extension to the time limit was provided then. Taxpayers could file these pending returns on or before 31st March 2019.
Back in early 2020, several tax professionals and industry leaders urged the government to reopen the GST amnesty scheme for several months due to the COVID pandemic. The government finally acceded to their request.
CBIC implemented the GST Amnesty Scheme for the second time through a notification dated 1st June 2021. It applies to all the pending GSTR-3B returns of previous tax periods between July 2017 and April 2021.
In February 2023, the GST Council at its 49th meeting recommended implementing GST amnesty scheme for taxpayers who have not yet filed GSTR-4, GSTR-10 and GSTR-9 of the past financial years. Also, the Council suggested providing relief to those whose GST registrations were cancelled by allowing them more time to revoke such cancellations. Further, the authorities would not invoke Section 62 for failure of certain taxpayers who did not furnish returns by time limit defined in notice if they filed on or before 30th June 2023.
Implementation of Section 128A and Introduction of Rule 164 in the CGST Act
Section 128A, introduced through the Finance (No. 2) Act, 2024, was added to the CGST Act, 2017 following the recommendations from the 53rd GST Council Meeting, with Notification 17/2024 – Central Tax, making it effective from November 1, 2024. In line with the 54th GST Council Meeting’s suggestions, Rule 164 has now been incorporated into the CGST Rules, 2017 via Notification No. 20/2024 – Central Tax dated October 8, 2024, and will also come into effect on November 1, 2024. This rule lays down the procedures, terms, and conditions to benefit from Section 128A, including specified forms.
Additionally, March 31, 2025, has been set as the deadline for the payment of tax to qualify for Section 128A benefits, as per Notification No. 21/2024 – Central Tax dated October 8, 2024. The government will issue further clarifications in a forthcoming circular, but this has not yet been released.
Who is Eligible for Waiver of Interest and/or Penalty?
Section 128A(1) outlines three categories of individuals eligible for the waiver scheme:
Those liable to pay tax based on:
- A Show Cause Notice under Section 73(1) or a statement under Section 73(3).
- An Adjudication Order under Section 73(9).
- An Order issued by the Appellate Authority or Revisionary Authority under Section 107(11) or Section 108(1).
Also, the first proviso to Section 128A(1) extends eligibility to cases where the original notice was issued under Section 74(1), but the proper officer has been directed under Section 75(2) to reassess the tax under Section 73(1).
Further Eligibility Conditions:
(A) The Notice or Order must relate to the period from 1st July 2017 to 31st March 2020.
(B) The individual must have paid the full tax amount stated in the notice, statement, or order before the notified date.
Deadlines for Payment and Filing under the Waiver Scheme
The timelines for tax payment have been set by Notification No. 21/2024 – Central Tax dated 08.10.2024, with the following provisions:
- The general deadline for tax payment is 31.03.2025.
- If tax is being re-determined under Section 73 instead of Section 74, based on an order under Section 75(2), the payment deadline will be six months from the date the re-determination order is issued by the proper officer under Section 73.
Benefits of GST Amnesty Scheme
- It promotes compliance among defaulters by encouraging adherence to tax regulations, leading to a more stable and predictable revenue stream for the government.
- Provides financial relief to taxpayers burdened with late fees, allowing them to reinvest saved funds into their business for growth and operational improvements.
- Enables businesses with cancelled GST registrations due to non-filing to re-register, while also allowing taxpayers to clear pending returns without incurring steep interest charges.
- Significantly reduces penalties for taxpayers filing overdue GST returns, helping them address backlogs and meet regulatory requirements.
- Facilitates the updating of tax records without hefty penalties, easing the administrative burden on both tax authorities and taxpayers for smoother operations.
Procedure for Filing a Waiver Application
| S. No. | Process | Form | Rule | Comments/ Important Instructions |
|---|---|---|---|---|
| 1 | Application under Section 128A (1) (a) | GST SPL 01 | 164 (1) | For waiver of notice or Statement. |
| 2 | Application under Section 128A (1) (b) or (1) (c) | GST SPL 02 | 164 (2) | For waiver of demand order, appeal, or revision order. |
| 3 | Show Cause Notice | GST SPL 03 | 164 (8) | States reasons for rejection, short payment, and hearing date. |
| 4 | Reply to Show Cause Notice | GST SPL 04 | 164 (9) | Must be filed within one month with supporting documents. |
| 5 | Order for Conclusion of Proceedings | GST SPL 05 | 164 (10) | Issued when application or reply is admitted/allowed. |
| 6 | Order for Rejection of Application | GST SPL 07 | 164 (12) | States reasons for rejection and is appealable. |
| 7 | Order passed by the proper officer on appeal | GST SPL 06 | 164 (15) (b) (i) | Issued when appeal is allowed. |
| 8 | Undertaking for restoration of Appeal | GST APL 08 | 164 (15)(b)(ii) | Given within three months of rejection order. |
FAQs
When Does the GST Amnesty Scheme Not Apply?
The waiver scheme shall not apply in the following cases:
- For any amount payable due to an erroneous refund, as specified under Section 128A (2).
- If there is a pending appeal or writ petition filed by the person, and the applicant has not withdrawn it, in accordance with Section 128A (3).
Deadlines for Filing the Waiver Application?
Rule 164(6) specifies the final dates for applying under the waiver scheme:
- In standard cases, the last date for submitting an application is 30.06.2025.
- For cases involving re-determination, the deadline is six months from the date the re-determination order is communicated by the proper officer under Section 73.