A. CASES WHERE WAIVER OF INTEREST OR PENALTY IS AVAILABLE FOR F.Y. 2017-18 TO F.Y.2019-20
| 1. Notice or statement issued under section 73; however, no demand order issued under said section; | Demand order issued under section 73 and no appeal filed before first appellate authority (commissioner appeals) or no application filed for rectification of adjudication order; |
| 2. Demand order issued under section 73 and appeal filed before first appellate authority (commissioner appeals) or application filed for rectification of adjudication order. However, order not passed by commissioner appeals or revisional authority, as the case may be; | Order passed by the commissioner appeals or revisional authority. However, no appeal was filed before appellate tribunal; |
| 3. Appeal filed before appellate tribunal. However, no order has been passed by the appellate tribunal. | – |
Note: The waiver of interest and penalty applies to proceedings initiated under Section 73 of the CGST Act. In certain situations where notices were issued under Section 74, and these proceedings are to be treated as if they fall under Section 73 due to directives from the appellate authority etc. Consequently, the officer is required to issue an order treating these notices as if they originated under Section 73. Therefore, notices issued under Section 74 or / orders issued under Section 73, as per these directives, will also be eligible for the waiver of interest and penalty under Section 128A.
B. PROCEDURE
| A | File an application on common portal of GST under: – Form GST SPL-01 for a notice or statement issued under Section 73 where an order under that section has not yet been issued. –Form SPL-02, in other cases. |
| B | Along with application, upload details of tax paid through Form GST DRC-03 for case no. 1 of para-A and details of tax settled* under electronic liability ledger for other cases. Note*: This indicates that payment via Form GST DRC-03 is not permitted. If the taxpayer has already deposited the tax using Form GST DRC-03, they must contact the tax department by submitting an application using Form GST DRC-03A. They should request an officer to record the payment in the “electronic liability register,” allowing the created demand to be set off. Once this is completed, the taxpayer can then file Form GST SPL-02. However, for the purpose of determining the date of payment of “full amount of tax” date of payment through Form GST DRC-03 may be considered. |
C. CONSIDERATIONS
| Pay the tax mentioned in the notice, statement or the order | The tax demanded in a notice, statement, or order must be paid in full by March 31, 2025 and before filing of application under Form GST SPL-01 or SPL-02. This requirement applies regardless of whether the tax pertains to the period from 2017-18 to 2019-20 or any other period. For instance, if a single notice is issued for multiple years, including those from 2017-18 to 2019-20 along with other periods, the tax must be paid for all years specified in the notice by March 31, 2025 and likewise for an statement or the order. Please note that while the waiver of interest and penalty does not apply to demands related to erroneous refunds, the taxpayer is still required to pay the full amount demanded in the notice, regardless of whether it pertains to erroneous refunds or other reasons. |
| Determination of tax payable in a notice, statement or order | To qualify for the waiver, the tax demand specified in a notice, statement, or order will be considered calculated as follows: Demand of tax as per notice or statement or the orderLess: Demand of tax on account of section 16(5) of the CGST Act, 2017Less: Demand of tax on account of section 16(6) of the CGST Act, 2017Effective demand of tax payable for claiming the waiver (a-b-c) Note: Above exclusions under section 16(5) and 16(6) are permissible only if demand was standalone created under section 16(4). If said demand was created by virtue of ground under section 16(4) and some other grounds as well, exclusion under 16(5) and 16(6) are not permissible. |
| Pay the tax enhanced in an appeal or rectification | In case tax department takes the order of demand into litigation by filing an appeal under section 107(3), 112(3), 117(1), 118(1), or by initiating proceedings under 108(1), and appellate authority etc. enhances the demand. Taxpayer must pay the additional demand within the 3 months of the date of the order, otherwise waiver of interest and penalty shall become void. |
| Withdrawl of appeal or writ petition | The appeal or writ petitions must be withdrawn before filing the waiver application, and the withdrawal order should be uploaded with the application. If the withdrawal order has not yet been issued, the applicant can upload a request for withdrawal along with the waiver application and must then upload the withdrawal order on the GST portal within one month of its issuance. |
| Miscellaneous | No refund shall be granted for interest and penalty already paid by the taxpayer. |
D. TIMELINE FOR FILING THE APPLICATION
E. VERIFICATION OF APPLICATION
| Show cause notice, if proper officer is not satisfied with application | Proper officer shall issue a notice (under Form GST SPL-03) within 3 months giving the applicant an opportunity of being heard as to why the application should not be rejected or if proper officer thinks application should not be rejected, he shall proceed without said notice. |
| Reply against show cause notice | Applicant may reply to Form GST SPL-03, within one month of receipt of said notice, by filing Form SPL-04. |
| Issuance of application acceptance order | Acceptance order shall be issued or deemed to be issued in following cases: 1.Proper officer has not issued the show cause notice and is satisfied with the application 2. Proper officer has issued a show cause notice and is satisfied with reply of the taxpayer 3. Proper officer doesn’t take any action, neither issue acceptance order nor rejection order, -within 3 months of receipt of application, where no show cause notice is issued -in case of show cause notice, within 3 months of receipt of reply, where taxpayer replies to the show cause within prescribed time. -within 4 months of show cause, where taxpayer doesn’t reply to the show cause notice. Explanation 1: The above time period shall exclude the time period from date of filing of application till the date of submission of order for withdrawal of appeal or the writ, as the case may be. |
| Acceptance order shall be issued under Form GST SPL-05 and proceeding conclusion order under Form GST SPL-06. Form GST SPL 05 and SPL-06 shall also include the interest and penalty payable on account of erroneous refund; interest and penalty levied on additional periods covered under notice or statement or order other than those for which waiver is available. Taxpayer is required to pay the interest and penalty within 3 months of the date of issuance of Form GST SPL-05. | |
| Rejection of application | In case, proper officer is not satisfied with replies submitted by taxpayer under Form GST SPL-04, he shall reject the application under Form GST SPL-07. |
F. APPEAL
| Form GST SPL-05 | No appeal can be filed. |
| Form GST SPL-07 | Appeal can be filed before Commissioner Appeals. Kindly note, subject matter of appeal should be waiver of interest or penalty and not on merits of original notice / statement / order. |
| Power of Commissioner Appeals and remedy available to taxpayer thereafter | 1. Reject the order passed by the proper officer and issues a revised order under Form GST SPL-06 and accordingly liability of taxpayer shall be modified. 2. Uphold the order of the proper officer and following remedy shall be available to taxpayer: a. File an appeal against the rejection order of Commissioner Appeals b. Apply for restoration of original appeal which was withdrawn at the time of filing Form GST SPL-02. However, taxpayer needs to file Form GST SPL-08 stating that he shall not prefer an appeal before tribunal against the rejection order of s.no. 2 above. |
| SW Point of View: Section 128A aims to minimize litigation while also offering greater relief for taxpayers. |
Akash Kumar Gupta, Associate, SW India
