Waiver of Interest & Penalty Rules in Tamil
- Tamil Tax upate News
- January 9, 2025
- No Comment
- 6
- 28 minutes read
Provision and procedures related to Waiver of interest or penalty or both u/s 128A of CGST Act for demands raised under section 73, for certain tax periods
Summary: Section 128A of the CGST Act, 2017, introduced via the Finance Act No. 2 of 2024, provides a waiver of interest, penalty, or both for specific tax demands raised under Section 73 for the financial years 2017-18, 2018-19, and 2019-20. The waiver applies to cases where notices or orders are issued under Section 73 but are not finalized under appellate or tribunal proceedings. Additionally, cases transitioned from Section 74 to Section 73 under Section 75(2) are included. Rule 164, effective November 1, 2024, outlines procedures for availing the waiver, requiring taxpayers to submit applications via Forms GST SPL-01 or SPL-02, along with requisite documentation. Applications must be filed within stipulated deadlines, typically three months from March 31, 2025. Payments can be made through electronic cash or credit ledgers, except for reverse charge mechanism cases, where cash is mandatory. The process includes opportunities for applicants to respond to rejection notices (Form SPL-03) and appeal decisions. Cases excluded from the waiver include late fees, erroneous refunds, and interest on delayed returns. Any misstep, such as failing to withdraw appeals or meet tax payment deadlines, may render waivers void. Taxpayers must carefully follow procedural requirements and timelines to secure the waiver benefits effectively.
The Finance Act No. 2, 2024 had inserted a new section 128A in the CGST Act, 2017 with effect from 01.11.2024 to provide waiver of interest or penalty or both, in respect of demand notices under Section 73 for the financial year 2017-18, 2018-19 and 2019-20, in the following situations:
a. Where a notice or a statement issued under section 73(1) or section 73(3), but where no order under section 73(9) has been issued;
b. Where an order has been issued under section 73(9), in respect of the notice/ statement issued under section 73, but where no order has been issued by the Appellate Authority/ Revisional Authority under section 107(11) or section 108(1);
c. Where an order has been issued by the Appellate Authority/ Revisional Authority under section 107(11) or section 108(1), in the cases where notice/ statement was issued under section 73 and where no order under section 113(1) has been passed by the Appellate Tribunal.
Cases also covered under Section 128A – as per the first proviso of Section 128A(1), in cases where a notice was initially issued under section 74 for FYs 2017-18, 2018-19 and 2019-20, and an order is passed or required to be passed by the proper officer under section 73 (in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court in accordance with the provisions of section 75(2)
I. List of other Cases also covered given at the end in “VI. Other point “
II. List of Cases NOT covered also given at the end in “VI. Other point “
And through Notification No. 20/2024 – Central Tax dated 08.10.2024 –Rule 164 has been inserted with effect from the November 01, 2024, namely:
“164. Procedure and conditions for closure of proceedings under section 128A in respect of demands issued under section 73.”
Procedures For Availing Benefit of Waiver of Interest Under Section 50 & Penalty U/S 73 Is Given in Table
I. Points To Be Keep In Mind While Filing of Application: –
| RULE | DESCRIPTION | FORMS (Electronically on portal ) | CONDITIONS |
| 164(1) | Notice or a statement mentioned in section 128A(1)(a) | FORM GST SPL-01 | File along with the details of the payments made in FORM GST DRC-03 for tax demand up to 31.3.2025
Shall be filed within a period of three months from the date notified under section 128A (1), i.e., within three months from 31.03.2025 (not.21/24) Enclosures:- 1. Self Cert. notice. 2. Appeal withdrawal proof. 3. DRC-03 |
| 164(2) | Order mentioned in section 128A(1)(b) and 128A(1)(c) | FORM GST SPL 02 | Payment towards tax demanded shall be made up to 31.3.2025, only by crediting the amount in the electronic liability register against the debit entry created by the said order
Further, if payment towards tax demanded has been made through FORM GST DRC-03, an application in FORM GST DRC-03A, shall be filed up to 31.3.2025 for credit of the said amount in the Electronic Liability Register against the debit entry created for the said demand, before filing the application in FORM GST SPL 02. SPL-02 shall be filed within a period of three months from the date notified under section 128A (1), i.e., within three months from 31.03.2025 (not.21/24) Enclosures:- 1. Self Cert. order. 2. Appeal withdrawal proof. 3. proof of paid via DRC-03 and adjust through 3A. |
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1) Separate Application: – Multiple notices/ statements/ orders has been issued to the Taxpayer, then required to file a separate application in FORM GST SPL-01 or FORM GST SPL-02 in respect of each of the concerned notice/ statement/ order. 2) Application to be filed with:- Application in FORM GST SPL- 01/SPL -02 to be filed with below mentioned proper officer, who will issue the order in FORM SPL 05 :- a) In cases of FORM SPL 01, who is proper officer for issuance of order as per section 73 (means who has issued the notice) and b) In cases of FORM SPL 02, who is the proper officer referred to in section 79 (in case of CGST department proper officer is Deputy or Assistant Commissioner of Central Tax of the Act and in case of Madhya Pradesh SGST department proper officer is Deputy Commissioner of State Tax/Assistant Commissioner of State Tax/State tax officer posted at circle level. For Other States required to check order issued by state GST Commissioner for delegation of power to sub-ordinate using power given under section 5 of respective SGST Act. 3) Amount of tax Payable :- 3.1 Demand of tax :-Where the notice or statement or order mentioned in section 128A(1) includes demand of tax, partially on account of erroneous refund and partially for other reasons, OR partially for the period mentioned in the said sub-section and partially for the period other than that mentioned in the said sub-section Then:- Application SPL-01/SPL-02 may be filed only after payment of the full amount of tax demanded in the said notice or statement or order, on or before the date notified under the said sub-section. 3.2 Reduced by:- The amount payable shall be the amount that remains payable, after deducting the amount not payable in accordance section 16(5) and 16(6), from the amount payable in terms of the notice or statement or order under section 73, as the case may be and he is not required to file an application for rectification for the same in terms of the special procedure notified under section 148 vide notification No. 22/2024-Central tax, dated 8th October 2024. 3.3 Time of tax payment:- Payment of Full amount tax was made before Section 128A comes into effect, or after that, and irrespective of whether such payment was made before the issuance of the demand notice or demand order, or after that, shall be considered as paid towards the amount payable in sub-section (1) of Section 128A subject to payment done up to the 31.03.2025. 3.4 Who can pay the tax:- Tax payers or any other person on behalf of the taxpayer 3.5 Refund of amount paid:- Where interest and penalty has already been paid, no refund of the same shall be available, further note that this paid amount cannot be adjust against any other payable amount 3.6 Mode of tax Payment :- Demand of tax can be paid – by debiting from electronic cash ledger or by utilizing the Input Tax Credit (ITC), by debiting the electronic credit ledger, or partly from both. But demand of tax due to Reverse Charge Mechanism or by the Electronic Commerce Operator under section 9(5) or erroneous refund, then said amount shall be required to be paid by debiting the electronic cash ledger only and not through the electronic credit ledger. 4) Time Limit of filing of Application (SPL-01/ 02):- Any person who wishes to file an application, may do so within a period of three months from the date notified under section 128A(1) i.e. up to 30.06.2025 (3 months from 31.3.2025) BUT Where an application in FORM GST SPL-02 For cases covered in section 75(2) i.e. cases converted from 74 to 73, the time limit for filing the said application shall be Six months from the date of communication of the order of the proper officer re-determining of such tax under section 73. 5) Withdrawal of an appeal or writ petition: – When the applicant has been filed for withdrawal of an appeal or writ petition, but the order for withdrawal has not been issued by the concerned authority till the date of filing of the application then the applicant shall upload the copy of such application or document filed for withdrawal of the said appeal or writ petition along with SPL-01/SPL-02 And Also required to upload Copy of withdrawal Order within one month from the communication of said order. |
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| II. PROCEDURE FOR ISSUING ORDER :- | |||
| 164(8) | PO View:- Application made in FORM GST SPL-01 or FORM GST SPL-02 is liable to be rejected as not being eligible | NOTICE IN FORM GST SPL-03 | Officer shall issue notice within three months from the date of receipt of the application in FORM GST SPL-01 or FORM GST SPL-02, and shall also give the applicant an opportunity of being heard. |
| 164(9) | Reply to notice received in Form SPL-03 | REPLY IN FORM GST SPL-04 | Applicant may file a reply within a period of one month from the date of receipt of the said notice |
| 164(10) | PO View:- application is eligible for waiver of interest and penalty then Order for Concluding of proceedings | Order in FORM GST SPL-05 | a) In respect of an application filed in FORM GST SPL-01, the summary of order in FORM GST DRC-07 shall not be required to be issued along with SPL-05 by the proper officer, in respect of the said notice or statement;
b) In respect of an application filed in FORM GST SPL-02, the liability has been created in the part II of Electronic Liability Register, shall be modified accordingly by issuing order in SPL-05 and proceeding deemed to be concluded. Provided that no appeal shall be lie against the order for which FORM SPL 02 has been filed [section 128A(4)] |
| 164(12) | Officer is not satisfied with the reply of the applicant then order for rejecting the said application | Rejection Order In FORM GST SPL-07 | Time Limit of Order:-
1. If No Notice (FORM GST SPL-03) issued:- Order in FORM SPL-05 within 3 months from date of receipt of FORM SPL-01/SPL-02. 2. IF Notice in FORM SPL-03 issued: – Order in FORM SPL-05/SPL-07:- Within 3 months from date of receipt of FORM SPL-04 Or. Within 4 months from date of issuance of Notice in FORM SPL-03, if NO reply received in FORM SPL-04. 3. Excluded period :-In case of withdraw of Writ/Appeal :- Period, from date of filing of FORM SPL-01/SPL-02 To date of submission of order of withdrawal , Shall not be included in the time limit for issuing Order in FORM SPL-05/SPL-07. DEEMED APPROVAL:- 4) If no order is issued by the proper officer within the time limit then the application in FORM GST SPL-01 or FORM GST SPL-02 shall be deemed to be approved and the proceedings shall be deemed to be concluded. |
| III. ACTION AFTER ISSUING OF REJECTION ORDER IN GST FORM SPL-07 :-
IF No Appeal is filed against Order GST FORM SPL-07 within the time period specified section 107(1), the original appeal, if any, filed by the applicant against the order mentioned in section 128A(1)(b) and (c), shall be restored. IF Appeal is filed against Order GST SPL-07 |
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| 164 (15) (b) (i) | Favorable Order passed by the appellate Authority | ORDER in GST SPL-06 | 1. If Appellate Authority held that Wrongly rejected in GST SPL 07, shall pass an order in FORM GST SPL-06 by accepting the said application and concluding the proceedings under section 128A. |
| 164 (15)(b)(ii) | Un Favorable Order passed by the appellate Authority subject to
Undertaking for restoration of Appeal in GST SPL 08 |
GST SPL 08 | 2. If Appellate Authority held that rightly rejected in GST SPL 07, shall pass an order in FORM GST APL 04. Then the original appeal, if any, filed by the applicant against the order mentioned in section 128A(1)(b) and (c), shall be restored, subject to condition that the applicant files an undertaking in FORM GST SPL-08, within a period of three months from the date of issuance of the order in FORM GST APL-04, that he has neither filed nor intends to file any appeal against the said order in GST APL 04. |
II. Action after Issuing of Acceptance Order in SPL-05:-
1. There is no need to take any action when order under GST SPL 05 for accepting the application in form SPL 01/ SPL 02 but subject to below.
2. Cases where department has filed an appeal against the order mentioned in clause (b) or clause (c) of sub-section (1) of section 128A and the Appellate Authority or the Appellate Tribunal or the court or the Revisional Authority, has issued an order enhancing the tax liability, and in the meanwhile the proper officer has issued an order in FORM GST SPL-05 under section 128A Taxpayer is required to pay an additional amount of tax liability within the three months from the said order as per the second proviso to section 128A(1) such additional payment is not made within the time limit the waiver of interest, or penalty, or both as per the order issued in FORM GST SPL-05 or FORM GST SPL-06 shall become void.
III. Point for Erroneous refund.
Taxpayer is required to pay any amount of interest, or penalty, or both, in respect of any demand pertaining to erroneous refund or on account of demand pertaining to the period other than the period mentioned in section 128A(1) for which the details of such amount have been mentioned in FORM GST SPL-05 or FORM GST SPL-06, the applicant shall pay the said amount of interest, or penalty, or both, within a period of three months from the date of issuance of the order in FORM GST SPL-05 or FORM GST SPL-06. If the said amount is not paid within the said time period, the waiver of interest, or penalty, or both, under section 128A as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, shall become void.
IV. Other Points:
1. CASES ALSO COVERED
- Cases relating to section 75(2) also covered as discussed earlier
- Cases also covered where the tax due has already been paid and the notice or demand orders under Section 73 only pertains to interest and/or penalty involved.
- Cases also covered where the SLP was filed to the Honorable Supreme Court instead of it is not covered under 128A(3), according to Serial no. 9 of table of the Circular no. 238, subject to withdrawal of SLP.
- Cases under IGST act and Compensation cess act are also covered.
- Cases involving demand of irregularly availed transition credit are also covered subject to date of transitional credit in electronic credit ledger is to be upto 31.03.2020.
- Any penalty, including penalties under section 73, section 122, section 125 etc, demanded under the demand notice/ statement/ order issued under section 73, is covered under the waiver provided under Section 128A but late fee, redemption fine etc are not covered under the waiver provided under Section 128A.
2. CASES NOT COVERED:
- Any Amount payable on account of erroneous refund.
- Taxpayer can’t avail partial waiver of interest or penalty or both, on certain issues, by making part payment of the amount demanded in the notice/ statement/ order.
- Benefit of waiver under Section 128A is not availed for import IGST payable under the Customs Act, 1962.
- Benefit of waiver of interest and penalty shall not be applicable in the cases where the interest has been demanded on account of delayed filing of returns, or delayed reporting of any supply in the return, as such interest is related to demand of interest on self-assessed liability and does not pertain to any demand of tax dues and is directly recoverable under sub-section (12) of section 75.
3. PROCESS TO FILE SPL-02 UNDER WAIVER SCHEME U/S 128A
Under the waiver scheme, for a demand notice or statement or order which has been issued under Section73 for the tax periods between July 2017 & March 2020, the taxpayers are required to file an application either in FORM GST SPL-01 or SPL02 in GST portal accordingly. Presently, Form GST SPL 02 is made available in the GST portal. Form GST SPL 01 will be available soon in the GST portal.
The process of filing SPL-02 electronically is detailed in below document:
FILING PROCESS OF SPL-02
1. Login into GST portal
2. Navigate to > Services > User Services > My Applications.
3. Under ‘Application type’ dropdown, select ‘Apply for Waiver Scheme under Section 128A’
4. However, if the taxpayer wants to file a new application for availing waiver on Interest and Penalty, the taxpayer can click on ‘New Application’
5. On click of ‘New Application’, the taxpayer will be able to see two forms, i.e.
- SPL-01: Application in case of notice or statement (This form will be made available soon).
- SPL-02: Application in case of demand order.
6. On selection of SPL-02, click on “CREATE APPLICATION”, and then a questionnaire will appear on the dashboard.
7. After answering the questionnaire, click NEXT button to proceed further.
8. The SPL-02 form will be displayed on the dashboard. The taxpayers have to fill the data and upload the mandatory as well as other relevant supporting documents as mentioned in Table given in Point I above. To download details advisory regarding filling of SPL-02 on GST portal click here.
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Disclaimer :
The information provided in this write-up is for general informational purposes only and is based on the prevailing GST laws and regulations as of the date of publication. Every effort has been made to ensure the accuracy and reliability of the content; however, readers are advised to verify the information with the relevant provisions of the GST law or seek professional advice tailored to their specific circumstances.
The author disclaim any liability for errors, omissions, or actions taken based on this material.
