Page 1 of 15
Circular No. 238/32/2024-GST
F. No. CBIC-20001/6/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
New Delhi, dated the 15
th
October, 2024
To,
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
The Principal Directors General / Directors General (All)
Madam/Sir,
Subject: Clarification of various doubts related to Section 128A of the CGST Act, 2017.
Based on the recommendations of the GST Council made in its 53
rd
meeting, Section
128A has been inserted in the Central Goods and Services Tax Act, 2017 (hereinafter referred to
as ‘the CGST Act’) with effect from 01.11.2024 to provide for waiver of interest or penalty or
both, relating to demands under section 73 of the CGST Act pertaining to Financial Years 2017-
18, 2018-19 and 2019-20, subject to certain conditions.
1.2 Subsequently, based on the recommendations of the GST Council made in its 54
th
meeting, Rule 164 has been inserted in Central Goods and Services Tax Rules, 2017 (hereinafter
referred to as ‘the CGST Rules’) with effect from 01.11.2024 vide notification No.20/2024-
Central tax dated 8
th
October 2024, providing for procedure and conditions for closure of
proceedings under section 128A of CGST Act.
1.3 Further, vide notification No. 21/2024-Central tax dated 8
th
October 2024, 31.03.2025
has been notified under sub-section (1) of section 128A of CGST Act as the date on or before
which the full payment of tax demanded in the notice/ statement/ order needs to be made by the
taxpayer in order to avail the benefit of waiver of interest or penalty or both under the said
section. Also, for cases where the application is made as per the first proviso to the sub-section
(1) of the section 128A of CGST Act, the date on or before which the full payment of tax
demanded in the order issued by the proper officer redetermining the tax under section 73 of
CSGT Act needs to be made by the taxpayer, has been notified as six months from the date of
issuance of such order by the proper officer redetermining the tax under section 73 of CGST Act.
2.1 Various doubts have been raised by the trade and the field formations in respect of
implementation of provisions of Section 128A of the CGST Act, relating to waiver of interest or
Page 2 of 15
penalty or both in respect of demands under section 73 of the CGST Act pertaining to Financial
Years 2017-18, 2018-19 and 2019-20.
2.2 In order to clarify the issue and to ensure uniformity in the implementation of the
provisions of the law across field formations, the Board, in exercise of its powers conferred by
section 168(1) of the CGST Act, hereby issues the following clarifications and guidelines.
2.3 Unless otherwise specified, all the sections mentioned in this circular refer to sections
of the CGST Act and all the rules mentioned herein refer to the rules of CGST Rules.
3. The procedure to be followed by the taxpayers and the tax officers to avail and
implement the benefit provided under Section 128A, is as follows:
3.1 Filing of application:
3.1.1 Section 128A provides for “Waiver of interest or penalty or both relating to demands
raised under section 73, for certain tax periods”. Therefore, provisions of Section 128A are
applicable 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:
(a)Where a notice issued under sub-section (1) of section 73 or a statement issued under
sub-section (3) of section 73, but where no order under sub-section (9) of section 73
has been issued;
(b) Where an order has been issued under sub-section (9) of section 73, in respect of
the notice/ statement issued under section 73, but where no order has been issued by
the Appellate Authority/ Revisional Authority under sub-section (11) of section 107 or
sub-section (1) of section 108;
(c) Where an order has been issued by the Appellate Authority/ Revisional Authority
under sub-section (11) of section 107 or sub-section (1) of section 108, in the cases
where notice/ statement was issued under section 73 and where no order under sub-
section (1) of section 113 has been passed by the Appellate Tribunal;
3.1.2 Additionally, as per the first proviso to sub-section (1) of Section 128A, 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 sub-section (2) of section 75), those cases are also covered under Section 128A
for the purpose of waiver of interest or penalty or both.
Page 3 of 15
3.1.3 In cases referred to in clause (a) of sub-section (1) of Section 128A where a notice/
statement under Section 73 has been issued demanding tax interalia pertaining to the period
from July 2017 to March 2020, for which no order has been issued under section 73, an
application in FORM GST SPL-01, may be filed electronically on the common portal, by the
taxpayer.
3.1.4 In cases referred to in clause (b) of sub-section (1) of Section 128A, where an order has
been issued under Section 73 demanding tax inter alia pertaining to the period from July 2017
to March 2020, for which no order has been issued under section 107 or section 108, an
application in FORM GST SPL-02, may be filed electronically on the common portal, by the
taxpayer. Similarly, in cases referred to in clause (c) of sub-section (1) of Section 128A, where
an order has been issued under Section 107 or Section 108, but no order has been issued under
section 113, an application in FORM GST SPL-02, may be filed electronically on the common
portal, by the taxpayer.
3.1.5 The application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be,
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. However, as per the first proviso to sub-section (1) of
Section 128A, where a notice has been issued under section 74, and the Appellate Authority or
Appellate Tribunal or a court directs the proper officer to redetermine the tax as if the demand
notice is issued under section 73, in accordance with the provisions of section 75(2), then same
is covered under clause (b) of sub-section (1). Therefore, as mentioned in proviso to sub-rule
(6) of Rule 164, in such cases, an application in FORM GST SPL-02, can be filed within six
months from the date of communication of order of the proper officer redetermining the amount
of tax to be paid under section 73.
3.1.6 Where an appeal under Section 107 or section 112 has been filed by the taxpayer, against
an order referred to in clause (b) or clause (c) of sub-section (1) of section 128A, or where a
writ petition has been filed by the taxpayer against a notice/ statement/ order referred to in
clause (a) or (b) or clause (c) of sub-section (1) of section 128A, the taxpayer is required to
withdraw the same before filing an application for waiver of interest or penalty or both, and
enclose the order of withdrawal of such appeal/ writ petition in along with the application filed
in FORM GST SPL-01 or FORM GST SPL-02, as the case may be. However, in cases where
the applicant has filed the application or any other document, for withdrawal of an appeal or
writ petition before Appellate Authority or Appellate Tribunal or a court, as the case may be,
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, he is required to upload the
copy of such application or the document filed for withdrawal of the said appeal or writ petition
along with the said application in FORM GST SPL-01 or FORM GST SPL-02. It is to be
mentioned that he is required to upload the final order for withdrawal of the said appeal or writ
petition on the common portal, within one month of the issuance of the said order for withdrawal
by the concerned authority.
Page 4 of 15
3.1.7 It may be noted that, in case the taxpayer has been issued multiple notices/ statements/
orders pertaining to demands under section 73, for period from July 2017 to March 2020, he is
required to file a separate application in FORM GST SPL-01 or FORM GST SPL-02, as the
case may be, in respect of each of the concerned notice/ statement/ order.
3.2 Payment of tax:
3.2.1 With respect to a notice or statement referred to in clause (a) of sub-section (1) of
Section 128A, i.e., a notice or statement that is yet to be adjudicated, the payment towards the
tax demanded in the said notice shall be made by the taxpayer through FORM GST DRC-03.
3.2.2 With respect to an order referred to in clause (b) and clause (c) of sub-section (1) of
Section 128A, the payment towards such tax demanded shall be made by the taxpayer, only by
the making the payment against the debit entry created in the Part II of the Electronic Liability
Register (ELR) by the demand order. In this regard, the procedure mentioned in para 4 of
Circular No. 224/18/2024 -GST dated 11
th
July 2024 may be referred to. However, in cases
where the payment towards tax demanded in the demand order has already been made through
FORM GST DRC-03, the procedure prescribed in rule 142(2B) may be followed. In such cases,
the taxpayer shall be required to file an application in FORM GST DRC-03A as prescribed in
the said rule, 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. For the purposes of determining the date of payment of full
amount of tax, the date on which the amount has been paid through FORM GST DRC-03 may
be considered and not the date on which the said amount has been adjusted using FORM GST
DRC-03A.
3.2.3 Such payment shall be made on or before the date notified under section 128A (1), i.e.,
on or before 31.03.2025. Where applications are filed in respect of cases referred to in the first
proviso to sub-section (1) of section 128A, then the applicants shall be required to make the
payment on or before the date notified under section 128A (1) specifically for those cases, i.e.,
within six months of the communication of the order of the proper officer redetermining the
amount of tax to be paid under section 73.
3.2.4 In cases where the amount of tax payable as per the notice/ statement/ order includes the
amount that was demanded due to contravention of provisions of sub-section (4) of section 16,
which is however not payable anymore due to the retrospective insertion of sub-section (5) and
sub-section (6) to section 16, the full amount of tax payable as per the notice/ statement/ order
as mentioned in sub-section (1) of section 128A for eligibility of waiver of interest or penalty
or both shall be calculated after deducting the amount, which is not payable anymore as per
sub-sections (5) or sub-section (6) of section 16, as per sub-rule (5) of Rule 164. In this regard,
it is also to be mentioned that, where the taxpayer is deducting the amount of input tax credit
which was denied on account of contravention of sub-section (4) of section 16, but which is
Page 5 of 15
now available as per retrospectively inserted provisions of sub-section (5) or sub-section (6) of
section 16 of the CGST Act, 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 8
th
October 2024.
3.2.5 It is also clarified that while calculating the amount deductible on account of not being
payable in accordance with sub-section (5) or sub-section (6) of Section 16, from the amount
payable in terms of the notice or statement or order under section 73, as the case may be,
taxpayer is required to ensure that such amount is deducted only where ITC has been denied
solely on account of contravention of Section 16(4) of the CGST Act and not on any other
grounds. The tax officer scrutinising such applications is also required to verify that the said
amount that has been deducted by the taxpayer as not payable anymore on account of
retrospective insertion of sub-section (5) and sub-section (6) to section 16, was initially denied
solely deducted on the basis of contravention of sub-section (4) of section 16, and not on any
other grounds.
3.2.6 It is further mentioned that, in cases referred to in sub-rule (3) and sub-rule (4) of rule
164, the applicant can file the application for waiver of interest or penalty or both under section
128A, in respect of a notice/ statement/ order mentioned in sub-section (1) of section 128A,
only after payment of full amount of tax demanded in the said notice/ statement/ order, including
on account of demand pertaining to erroneous refund, if any, and also on account of demand
pertaining to the period other than the period mentioned in sub-section (1) of section 128A, if
any, in the said notice/ statement/ order.
3.3 Processing of application and issuance of order:
3.3.1 The proper officer for processing the application for waiver of interest or penalty or both
under Section 128A, would be the proper officer to issue the order under section 73, in case the
application is filed in FORM GST SPL-01, and would be the proper officer for recovery under
Section 79, in case the application is filed in FORM GST SPL-02.
3.3.2 The proper officer on receipt of the application in FORM GST SPL-01 or FORM GST
SPL-02, shall examine the said application. If, on examination, he finds that the said application
is liable to be rejected, he shall issue a notice to the applicant, within three months from the date
of receipt of the said application, in FORM GST SPL-03 on the common portal. The proper
officer shall also give the applicant an opportunity of personal hearing.
3.3.3 On receipt of the notice in FORM GST SPL-03, the applicant may file his reply in
FORM GST SPL-04, electronically on the common portal, within a period of one month from
the date of receipt of the notice.
Page 6 of 15
3.3.4 The proper officer shall issue an order in FORM GST SPL-05, accepting the said
application, if he is satisfied that the applicant is eligible for waiver of interest or penalty or
both under Section 128A. However, if the proper officer, based on the application and the reply
in FORM GST SPL-04 received from the taxpayer, is of the view that the applicant is not
eligible for waiver of interest or penalty or both under Section 128A, he shall issue an order in
FORM GST SPL-07, rejecting the said application.
3.3.5 The order in FORM GST SPL-05 or FORM GST SPL-07 shall be required to be issued
within the time period prescribed in sub-rule (13) of rule 164. In terms of sub-rule (14) of rule
164, in cases where no order is issued within the time limit prescribed in sub-rule (13) of rule
164, the application filed in FORM GST SPL-01 or FORM GST SPL -02, as the case may be,
shall be deemed to be approved, and the order in FORM GST SPL-05 approving the said
application shall be made available on the common portal.
3.3.6 In cases where an application for waiver of interest or penalty or both was filed in FORM
GST SPL-01 and an order approving the said application is issued by the proper officer in
FORM GST SPL-05, then a summary of order in FORM GST DRC-07 need not be issued on
the common portal. However, in cases where an order in FORM GST SPL-05 or in FORM
GST SPL-06, as the case may be, has been issued approving an application filed in FORM GST
SPL-02, the liability earlier created in the ELR – Part II by the demand order or the appellate
order, as the case may be, shall stand modified accordingly.
3.3.7 It is also to be mentioned that as per the second proviso to sub-section (1) of Section
128A, the conclusion of proceedings against a demand notice/ statement/ order under this
section and further issuance of such conclusion order in FORM GST SPL-05 or in FORM GST
SPL-06, as the case may be, in cases where the department had filed an application/ initiated
revisional proceedings against the said demand notice/ statement/ order, is conditional upon the
payment of additional tax payable, if any, as determined by the Appellate Authority or the
Appellate Tribunal or the court or the Revisional Authority, as the case may be, within three
months of issuance of such order. In case, such additional tax is not paid within the specified
time limit, then as per sub-rule (16) of Rule 164, the waiver of interest or penalty or both
provided under section 128A as per the order issued in FORM GST SPL-05 or FORM GST
SPL-06, as the case may be, shall become void.
3.3.8 Further, while processing the said application, the proper officer shall ensure that the
applicant has paid the amount of tax demanded in the notice/ statement/ order referred in sub-
section (1) of section 128A (other than the amount not payable anymore due to the retrospective
insertion of sub-section (5) and sub-section (6) to section 16, as referred in para 3.2.4), including
the amount of tax demand pertaining to erroneous refund, if any, and also on account of demand
pertaining to the period other than the period mentioned in sub-section (1) of section 128A, if
any, in the said notice/ statement/ order. Further, the proper officer shall also keep in
consideration that waiver of interest and penalty under section 128A is available only in respect
Page 7 of 15
of demand pertaining to the period mentioned in sub-section (1) of section 128A, and the
demand on issues other than on account of erroneous refund.
3.3.9 Where it is found that any amount of interest and penalty is payable by the applicant on
account of some demand pertaining to the period other than the period mentioned in sub-section
(1) of section 128A or pertaining to demand of erroneous refund, the detail of the same shall be
mentioned in column no. 19 and column no. 20 of FORM GST SPL-05 or FORM GST SPL-
06, as the case may be. Further, in such cases, an opportunity of personal hearing may be granted
to the applicant, before issuance of order in FORM GST SPL-05 or FORM GST SPL-06.
3.3.10 In cases referred in para 3.3.9, the applicant is required to pay the amount of interest or
penalty or both, detailed in column no. 19 and column no. 20 of FORM GST SPL-05 or FORM
GST SPL-06, within a period of three months from the date of issuance of the said order in
FORM GST SPL-05 or FORM GST SPL-06, as the case may be. In case where the said amount
is not paid within the period of three months from the date of issuance of the said order in
FORM GST SPL-05 or FORM GST SPL-06, as the case may be, 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, as per sub-rule (17) of rule 164.
3.4 Appeal against the orders issued under Rule 164:
3.4.1 No appeal shall lie under section 107, against an order issued in FORM GST SPL-05
concluding the proceedings under section 128A. The order issued in FORM GST SPL-07,
rejecting the application for waiver, shall be, however, appealable in accordance with sub-section
(1) of section 107 within the time limit specified therein, by filing an application in FORM GST
APL-01. In such cases, normally, no pre-deposit may be required to be paid by the taxpayer for
filing the said appeal, as the said amount may already have been paid as a part of payment of tax
dues involved in the demand notice/ statement / order before filing an application in FORM GST
SPL-01 or FORM GST SPL-02. However, in cases where no amount of tax dues has been paid
or amount of tax dues paid is less than the requisite amount for pre-deposit for filing appeal as
per sub-section (6) of section 107, the remaining amount of pre-deposit will be required to be
paid for filing the said appeal.
3.4.2 It is also important to note that the subject matter of the appeal will only be regarding the
applicability of waiver of interest or penalty or both under Section 128A and not on the merits
of the original notice/ statement/ order.
3.4.3 It is to be mentioned that, in cases where an appeal has been filed by the applicant against
the order in FORM GST SPL-07, and the appellate authority holds that the proper officer has
wrongly rejected the application, thereby allowing the applicant the benefit of the waiver of
interest or penalty or both, the said appellate authority shall pass an order in FORM GST SPL-
06. This form shall accordingly modify the liability created, if any, in the ELR-Part II.
Page 8 of 15
3.4.4 Where appeal had been withdrawn before filing an application in FORM GST SPL-02,
for availing the waiver of interest or penalty or both under Section 128A, but the application
for waiver is rejected by the proper officer by issuance of order in FORM GST SPL-07,
(a) in cases, where the taxpayer prefers an appeal against the said rejection order, and
the appellate authority holds that the proper officer has righty rejected the said
application made in FORM GST SPL-02, and issues an order in FORM GST APL-04,
then the original appeal filed by the applicant shall be restored, subject to condition that
the applicant files an undertaking electronically on the portal in FORM GST SPL-08,
that he has neither filed nor intends to file any appeal against such order of the Appellate
Authority.
(b) in cases, where the taxpayer prefers an appeal against the said rejection order, and
the appellate authority holds that the proper officer has wrongly rejected the said
application made in FORM GST SPL-02, and issues an order in FORM GST SPL-06,
thereby holding that the appellant is eligible for waiver of interest or penalty or both, no
appeal shall lie against the said order issued in FORM GST SPL-06.
(c) in case, where the taxpayer does not prefer an appeal within the time period
mentioned in sub-section (1) of section 107 against the said rejection order, then the
original appeal filed by the applicant shall be restored.
4. Further, the following issues with respect to availing the benefit of waiver of interest or
penalty or both provided under Section 128A, are also clarified hereby:
S.
No.
Issue Clarification
1 Whether the benefit provided
under Section 128A will be
applicable to taxpayers who
have paid the tax component in
full before the date on which
the said section has come into
effect?
In this regard, it is to be mentioned that all such
amount paid towards the said demand upto the date
notified under sub-section (1) of section 128A,
irrespective of whether the said payment has been
done 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, as long as the said amount has been
paid upto the date notified under sub-section (1) of
section 128A and was intended to be paid towards the
said demand.
2 Whether amount recovered by
the tax officers as tax due from
any other person on behalf of
the taxpayer, against a
particular demand can be
considered as tax paid towards
Yes.
The said amount recovered by the tax officers as tax
due from any other person on behalf of the taxpayer
against a demand, shall also be considered as the tax
paid towards the said demand, for the purpose of
section 128A provided the same has been recovered
Page 9 of 15
the same for the purpose of
Section 128A?
on or before the date notified under sub-section (1) of
section 128A.
3 Whether the amount recovered
by the tax officers as interest or
penalty or both, pertaining to
demand under Section 73
pertaining to Financial Years
2017-18, 2018-19 and 2019-20,
can be adjusted against the tax
amount payable towards the
demand made under Section 73
pertaining to the said financial
years?
No. It is mentioned that as per the third proviso to
sub-section (1) of section 128A, no refund of such
amount of interest or penalty or both, is available.
Accordingly, any amount paid by the taxpayer or
recovered by the tax officers, as interest or penalty
cannot be adjusted towards the amount payable as
tax.
4 Whether the benefit provided
under Section 128A will be
applicable in cases, 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?
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, the same
shall be considered for availing the benefit of section
128A.
However, the 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.
5
Whether the benefit under
Section 128A is available, if the
taxpayer intends to 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, as the case
may be, and opts to litigate for
the remaining issues?
No.
Section 128A (1) clearly provides that the waiver of
interest or penalty or both is only applicable when the
full amount of tax demanded in the notice/ statement/
order is paid.
6 Where the notice/order
involves multiple periods,
ranging from the period for
which waiver provided in
Section 128A is applicable, and
includes some other tax periods
for which such waiver is not
applicable, whether the benefit
The taxpayer is eligible to apply for waiver of interest
or penalty or both, in such cases where the demand
notice/ order spans tax periods covered under Section
128A and those not covered under the said section.
However, as per sub-rule (4) of Rule 164, the
taxpayer shall be required to pay the full amount of
tax demanded in the notice/ statement / order, as the
Page 10 of 15
of waiver of interest or penalty
or both under Section 128A can
be availed for the period
covered under section 128A?
If so, what is the tax amount
payable for claiming waiver
under Section 128A?
case may be, to avail the benefit of waiver of interest
or penalty or both under Section 128A.
Further, though the amount of tax demanded shall be
required to be paid as per the notice/ statement /
order, as the case may be, for whole of the period
covered under the said notice/ statement / order, but
the waiver of interest or penalty or both under section
128A shall only be applicable for the period specified
in section 128A, and not for the period not covered
under the said section.
On payment of the full amount demanded in the
notice/ statement/ order, if the proper officer finds
that the applicant is eligible for waiver of interest or
penalty or both for tax periods covered under Section
128A, he will reduce the liability to that extent in his
order in FORM GST SPL-05, and the remaining
liability of interest or penalty or both for tax periods
not covered under Section 128A, remains payable by
the taxpayer.
The said amount shall be required to be paid by the
applicant within three months from the date of
issuance of order in FORM GST SPL-05 or FORM
GST SPL-06, as the case may be. If the said amount
is not paid within the time limit as mentioned above,
the order in FORM GST SPL-05 or FORM GST
SPL-06, as the case may be, 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, as per sub-rule (17) of rule
164.
7 Where the notice/ statement/
order issued under Section 73
involves multiple issues and
one of them is regarding
demand of erroneous refund,
whether an application can be
filed for waiver of interest or
penalty or both under Section
128A?
Yes.
However, as per sub-rule (3) of Rule 164, the
taxpayer shall be required to pay the full amount of
tax demanded in the notice/ statement / order, as the
case may be, including on account of demand of
erroneous refund, to avail the benefit of waiver of
interest or penalty or both under Section 128A.
Page 11 of 15
If so, what is the tax amount
payable for claiming waiver
under Section 128A?
Further, in such cases, the waiver of interest or
penalty or both under section 128A shall only be
available in respect of tax demand other than that
pertaining to demand of erroneous refund.
On payment of the full amount demanded in the
notice/ statement/ order, if the proper officer finds
that the applicant is eligible for waiver of interest or
penalty or both for tax periods covered under Section
128A in respect of tax demand other than that
pertaining to demand of erroneous refund, he will
reduce the liability to that extent in his order in
FORM GST SPL-05, and the remaining liability of
interest or penalty or both, that corresponds to
demand of erroneous refund, remains payable by the
applicant.
The said amount shall be required to be paid by the
applicant within three months from the date of
issuance of order in FORM GST SPL-05 or FORM
GST SPL-06, as the case may be. If the said amount
is not paid within the time limit as mentioned above,
the order in FORM GST SPL-05 or FORM GST
SPL-06, as the case may be, 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, as per sub-rule (17) of rule
164.
8 In 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, and the taxpayer has not
paid the said additional amount
Yes, as per the second proviso to section 128A, the
conclusion of proceedings in such cases is subject to
the condition that the said person pays the additional
amount of tax payable, if any, in accordance with the
order of the Appellate Authority or the Appellate
Tribunal or the court or the Revisional Authority, as
the case may be, within three months from the date
of the said order.
Accordingly, it becomes clear that even in cases
where an order in FORM GST SPL-05 or in FORM
GST SPL-06 has been issued the conclusion of the
said proceedings will be subject to the condition that
the taxpayer pays the additional tax amount as
determined by the Appellate Authority or the
Page 12 of 15
of tax liability within the
specified time limit, what will
be the status of the conclusion
of proceedings under Section
128A?
Appellate Tribunal or the court or the Revisional
Authority by an order issued in the matter of appeal
filed by the department, within a period of three
months from the date of the such order enhancing the
tax liability.
In case such additional payment is not done within a
period of three months from the date of the said order,
then as per sub-rule (16) of Rule 164, the waiver of
interest or penalty or both under section 128A as per
the order issued in FORM GST SPL-05 shall become
void.
9 Sub-section (3) of section 128A
refers to only appeal or writ
petition.
In this regard, whether matters
where SLP filed by the
applicant is pending before the
Supreme Court, what is the
procedure to be followed by the
taxpayer to avail the waiver of
interest or penalty or both?
Yes, in such cases also the applicant will be required
to withdraw the said special leave petition and file an
application in FORM GST SPL-01 or FORM GST
SPL-02, as the case may be, along with proof of
withdrawal of SLP or the copy of the application or
any other document filed for withdrawal of SLP,
where the order for withdrawal of SLP has not been
issued at the time of filing application in FORM GST
SPL-01 or FORM GST SPL-02. In such cases, the
procedure mentioned in para 3.1.6 may be followed.
10 Whether the benefit provided
under Section 128A will be
available for matters involving
IGST and Compensation Cess?
Yes.
On joint reading of section 20 of the Integrated Goods
and Services Tax Act, 2017 and section 11 of GST
(Compensation to States) Act, 2017 along with section
128A of CGST Act, it becomes clear that the benefit
provided under Section 128A of CGST Act will be
available for matters involving IGST and
compensation cess as well.
In this regard, it is mentioned that in such cases, full
payment of tax means payment of CGST, SGST,
IGST and compensation cess demanded in the notice/
statement/ order, as the case may be.
11 Whether Section 128A covers
cases involving demand of
irregularly availed transition
credit?
The transitional credit is considered to be availed on
the date on which the said credit amount is credited
in the Electronic Credit Ledger.
On reading Rule 121 read with sub-rule (3) of rule
117, it is clear that any demand in respect of
transitional credit wrongly availed, whether wholly
Page 13 of 15
or partly can be made under section 73 or, as the case
may be, section 74.
Therefore, it is mentioned that if the amount of
transitional credit has been availed in the period
covered under Section 128A and notice for demand
of wrongly availed credit is issued under section 73,
the same is covered under Section 128A.
12 Whether Section 128A will
cover waiver of penalties under
other provisions, late fee,
redemption fine etc?
It is clarified that 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.
However, late fee, redemption fine etc are not
covered under the waiver provided under Section
128A.
13 Whether payment to avail
waiver under Section 128A can
be made by utilizing ITC?
Yes.
The payment of tax required to be made for eligibility
for waiver under section 128A is the amount of tax
demanded in the notice/ statement/ order. Therefore, it
can be paid either by debiting from electronic cash
ledger or by utilising the Input Tax Credit (ITC), by
debiting the electronic credit ledger, or partly from
both.
However, where the demand is in respect of any
amount of tax to be paid by the recipient under
Reverse Charge Mechanism or by the Electronic
Commerce Operator under section 9(5), then the said
amount shall be required to be paid by debiting the
electronic cash ledger only and not through the
electronic credit ledger. Further, where the amount
has to be paid for demand of erroneous refund, the
demand in respect of erroneous refund paid in cash is
required to be paid only by debiting the electronic
cash ledger only and not through the electronic credit
ledger.
14 Whether the benefit of waiver
under Section 128A be availed
qua import IGST payable under
the Customs Act, 1962?
No.
In such cases, demand is not issued under section 73
of the CGST Act, but is issued under the provisions of
Page 14 of 15
Customs Act, 1962 and therefore, such cases are not
covered under waiver of interest or penalty or both
under section 128A.
15 With retrospective insertion of
sub-sections (5) and (6) to
Section 16 of the CGST Act,
the tax demanded in notice/
statement/ order reduces.
Whether the entire tax amount
demanded in the notice/
statement/ order has to be paid
in such cases, to avail the
benefit under section 128A?
Sub-rule (5) of rule 164 mentions that the amount
payable in order to avail the benefit under section
128A, shall be calculated after deducting the amount
not payable in accordance with sub-section (5) or
sub-section (6) of Section 16, from the amount
payable in terms of the notice or statement or order
under section 73, as the case may be.
Therefore, the applicant is required to pay only the
amount that is payable, calculated after deducting the
amount not payable in accordance with sub-section (5)
or sub-section (6) of Section 16, from the amount
payable in terms of the notice or statement or order
under section 73, as the case may be, before
submitting the application. While calculating the
amount deductible on account of not being payable in
accordance with sub-section (5) or sub-section (6) of
Section 16, from the amount payable in terms of the
notice or statement or order under section 73, as the
case may be, taxpayer is required to ensure that such
amount is deducted only where ITC has been denied
solely on account of contravention of Section 16(4) of
the CGST Act and not on any other grounds.
He is also advised to provide a breakup of the amount
not payable by him anymore, as per sub-sections (5)
and (6) of section 16, in FORM GST SPL-01 or
FORM GST SPL-02, as the case may be, to enable the
officer to verify the payment easily.
It is also re-iterated that where the taxpayer is
deducting the amount of ITC which was denied on
account of contravention of sub-section (4) of section
16 of the CGST Act, but which is now available, as
per retrospectively inserted provisions of sub-section
(5) or sub-section (6) of section 16 of the CGST Act,
he is not required to file application for rectification in
respect of the same as per special procedure notified
under Section 148 vide notification No. 22/2024-
Central tax dated 8
th
October 2024.
Page 15 of 15
16 In case of application in FORM
GST SPL-02, where the
applicant has paid full or partial
amount of tax through FORM
GST DRC-03, whether the said
applicant is mandatorily
required to file application in
FORM GST DRC -03A for
such tax amount which he
desires to get adjusted against
tax demand as per FORM GST
DRC-07/ FORM GST DRC-
08/ FORM GST APL-04?
Yes.
In cases where order in FORM GST DRC-07, FORM
GST DRC-08 or FORM GST APL-04, as the case may
be, has been issued and such taxpayer has paid
required amount through FORM GST DRC-03, such
applicant is required to adjust the said amount towards
the demand created in the Electronic Liability
Register, as per the second proviso to sub-rule (2) of
rule 164, before filing the application in FORM GST
SPL-02.
5. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular.
6. Difficulty, if any, in implementation of the above instructions may please be brought to
the notice of the Board. Hindi version would follow.
(Sanjay Mangal)
Principal Commissioner (GST)
