The Indian Government periodically announces amnesty schemes under the Goods and Services Tax (GST) to help taxpayers resolve non-compliance issues, reduce the burden of penalties, and encourage voluntary compliance. In 2024, the New Amnesty Scheme aims to address certain categories of default while providing taxpayers with relief from penalties and late fees.

In 53rd GST Council Meeting, it was recommended that, considering the difficulties faced by the taxpayers, during the initial years of implementation of GST, the GST Council recommended, waiving interest and penalties for demand notices issued under section 73 of the CGST Act for the Fiscal years 2017-18, 2018-19 and 2019-20, in cases where the taxpayer pays the full amount of tax demanded in the notice upto 31.03.2025. The waiver does not cover demand of erroneous refunds. To implement this, the GST Council has recommended insertion of Section 128A in CGST Act, 2017.

Further, in 54th GST Council Meeting, the GST Council recommended insertion of rule 164 in CGST Rules, 2017, along with certain Forms, providing for the procedure and conditions for availment of benefit of waiver of interest or penalty or both, relating to tax demands under section 73 of CGST Act, pertaining to FYs 2017-18, 2018-19 and 2019-20, as per Section 128A of CGST Act. The Council also recommended to notify under sub-section (1) of Section 128A of CGST Act, 31.03.2025 as the date on or before which the payment of tax may be made by the registered persons, to avail the said benefit as per Section 128A of the CGST Act. The Council also recommended the issuance of a circular to clarify various issues related to availment of waiver of interest or penalty or both as per Section 128A of CGST Act.

Furthermore, by way of issuance of Notification No. 17/2024 (central tax), provision of Section 128A has been notified w.e.f. 01.11.2024 which was inserted by Finance (No. 2) Act, 2024. And Rule 164 of CGST Rules has been notified by issuance of Notification No.20/2024-Central Tax Dated: 08th October, 2024 which notified procedure to claim benefit of waiver of interest or penalty or both, relating to tax demands under section 73 of CGST Act, pertaining to FYs 2017-18, 2018-19 and 2019-20.

In view of the above, Amnesty Scheme 2024 (Section 128A) is typically designed to provide relief by way of waiver of interest or penalty or both, relating to tax demands under section 73 of CGST Act, pertaining to FYs 2017-18, 2018-19 and 2019-20. However, as per third proviso to Section 128A, where such interest and penalty has already been paid, no refund of the same shall be available. 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.

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.

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.

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).

Benefits of GST Amnesty Scheme

The GST Amnesty Scheme offers several key benefits:

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

Rule 164 outlines the steps for filing a waiver application and conducting subsequent proceedings, detailing 17 sub-rules and 8 forms. These sub-rules encompass both procedural requirements and essential conditions. To simplify understanding, the process can be examined step-by-step as follows:

Sr.No.	Process	Form	Rule
1.	Application for waiver of interest or penalty or both under Section 128A in respect of a notice or a statement mentioned in clause (a) of sub-section (1) of the said section	GST SPL-01	164(1)
2.	Application for waiver of interest or penalty or both under Section 128A, in respect of an order mentioned in clause (b) or clause (c) of sub-section (1) of the said section	GST SPL-02	164(2)
3.	Notice in response to an application filed under Section 128A	GST SPL-03	164 (8)
4.	Reply to notice issued under rule 164(8)	GST SPL-04	164 (9)
5.	Order for conclusion of proceedings as per Section 128A	GST SPL-05	164(10)
6.	Order for conclusion of proceedings as per Section 128A	GST SPL-06	164(15)(b)(i)
7.	Order for Rejection of Application submitted under Section 128A	GST SPL-07	164(12)
8.	Undertaking submitted under rule 164(15)(b)(ii)	GST SPL-08	164(15)(b)(ii)

How to Take Maximum Benefit of the Scheme

Review pending GSTR filings for all relevant tax periods. Identify unpaid taxes, late fees, and penalties for these periods.
Compute the potential savings under the scheme compared to the standard late fees and penalties.
File all pending returns within the scheme’s validity period. Pay outstanding taxes to ensure eligibility.

In conclusion, we can say that the New Amnesty Scheme under GST is a golden opportunity for taxpayers to regularize their compliance and reduce financial burdens. By acting promptly and strategically, businesses can maximize the benefits of this scheme and ensure smooth operations going forward.

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New Amnesty Scheme under GST- How to take maximum benefit of the scheme

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