Amnesty Scheme, 2024

[Bhavesh Suthar]

My query is with regard to Section 128A - Amnesty Scheme. We are in receipt of an order issued under Section 73, confirming the interest and penalty liability. Tax was discharged by us before issuance of order. Will this order be eligible for Amnesty Scheme since no tax is due in the order, only interest and penalty.

[KASTURI SETHI]

What is the date of payment of tax ?

[KASTURI SETHI]

What is the period of demand of tax involved ?

[Bhavesh Suthar]

Period is FY 2019-20

Payment was made on 07.08.2024

[KASTURI SETHI]

In this context, see Para No.4 (serial no.4} of Board's Circular No.238/32-2024-GST dated 15.10.24. 

[Bhavesh Suthar]

However, when I try to file DRC-03A, I am unable to adjust the demand as there is no tax liability in the order. Hence, I am unable to link the DRC-03 with the order. What can be done in that case?

[U ACCOUNT]

in our case is same situation we pay the tax in earler. and now only interest  demand in order

[Sadanand Bulbule]

In my considered opinion, if any taxpayer has paid tax earlier to the effective date of the amnesty scheme, he is not eligible for the benefit of waiver of penalty and interest under Section 128A. Meaning only after the payment of tax due in pursuance of the effective date, the benefit accrues on its own subject to procedural formalities.

Most of the time,  such amnesty schemes are in favour of the defaulters and not for compliants. Some times "risk" yields rewards.

[KASTURI SETHI]

The purpose of the Amnesty Scheme is to recover tax which is locked up in litigation and if tax is paid on one's own  prior to the issuance of a SCN (whatever may be the reason), that tax will be out of  the scope of litigation. 

[Sadanand Bulbule]

Well said Sir. 

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Sir, Thanks a lot for validation of my reply at serial no.8 dated 4.1.25.

[KASTURI SETHI]

Sh. Sadanand Bulbule Ji,

Sir, This is with reference to your views extracted below :-

"Most of the time, such amnesty schemes are in favour of the defaulters and not for complaints. Some times "risk" yields rewards." Emphasis is on "sometimes "risk" yields".

Himachal Pradesh High Court vide Order dated 21.12.24 in CWP 4899 of 2024 in the case of R.T. Pharma Vs. UOI & Others - 2024 (12) TMI 1228 - HIMACHAL PRADESH HIGH COURT has held that the benefit of the Amnesty Scheme (here waiver of late fee) cannot be denied on the ground that the petitioner was proactive and filed the GSTR returns before issuance of the Notification. The High Court has also held that the denial of the Amnesty Scheme on the ground of 'before' and 'after' the date of issuance of Notification is unequal treatment to the petitioner and is in violation of Article 14 of the Constitution of India. The High Court further observed the petitioner cannot be penalized for being proactive. This is not the intention of the Notification under Amnesty Scheme.

The whole judgement is worth reading. The querist can take cue from the above case law.

[Sadanand Bulbule]

Dear Sir

With all such judicial rulings,the department is stubborn to extend the justice to the deserving taxpayers. Every one cannot go to court. Situation is pathetic.

[KASTURI SETHI]

Yes, Sir. It is a practical position. 

[Yash Shah]

As per Section 128A(1) of CGST Act 2017, where any amount of tax is payable by a person for which a notice u/s 73(1) or statement u/s 73(3) has been issued but no order u/s 73(9) has been issued, pertaining to the period from 1st July, 2017 to 31st March, 2020 (i.e. FY 2017-18, 2018-19 & 2019-20), or a part thereof, and the said person pays the full amount of tax payable as per the notice or statement on or before the 31st March, 2025 then no interest under section 50 and penalty under this Act, shall be payable and all the proceedings in respect of the said notice or statement, as the case may be, shall be deemed to be concluded.

Further as per the 3rd proviso of the said sub-section where such interest or penalty has already been paid then no refund shall be available

As per Rule 164(1): Any person who is eligible for waiver of interest, or penalty, or both in respect of a notice or a statement mentioned in clause (a) of sub-section (1) of section 128A, may file an application electronically in FORM GST SPL-01 on the common portal, providing the details of the said notice or the statement, as the case may be, along with the details of the payments made in FORM GST DRC-03 towards the tax demanded.

Further as per Rule 164(6), FORM GST SPL-01 needs to file within a period of 3 months from 31st March, 2025.

In the given case, if notice or statement u/s 73 is for FY 2017-18, 2018-19 or 2019-20 the registered person is eligible for the GST Amnesty scheme u/s 128A and needs to file FORM GST SPL-01 within 3 months from 31st March, 2025

AI Summary

Amnesty Scheme eligibility: pay outstanding tax to secure waiver of interest and penalty under Section 128A, subject to filing.
The Amnesty Scheme under Section 128A permits waiver of interest under section 50 and penalty where a notice or statement under section 73(1)/(3) exists but no order under section 73(9) has been issued; payment of the full tax specified in that notice or statement by the scheme's cut-off renders proceedings concluded. No refund is available if interest or penalty was already paid. Eligible taxpayers must apply electronically in FORM GST SPL-01, provide notice details, and record payments via FORM GST DRC-03, within the specified filing window, though portal linkage issues arise when only interest/penalty remain after prior tax payment.