Section 128A gives waiver of interest or penalty relating to demand raised u/s 73 for the period 01-07-2017 to 31-03-2020. Rule 164 has been introduced which provides for procedure and conditions for closure of proceedings u/s 128A.

Section 128A(1)

Notwithstanding anything to the contrary contained in this Act,

where any tax is payable by a person pertaining to period 01-07-2017 to 31-03-2020, or part there of, chargeable with tax in accordance with,–

(a) a notice issued u/s 73(1) or a statement issued u/s 73(3), and where no order has been issued u/s 73(9); or

(b) an order passed u/s 73(9), and where no order has been passed u/s 107(11) or 108(1); or

(c) an order passed u/s 107(11) or 108(1), and where no order has been passed  113(1),

Section 128A gives waiver of interest or penalty only for the period 01-07-2017 to 31-03-2020.

1^st Proviso to Section 128A(1)

where a notice has been issued u/s 74(1) and

an order is passed or required to be passed by the proper officer in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court in accordance with section 75(2)

the said notice or order shall be considered to be a notice or order, as the case may be, referred to in clause (a) or clause (b) of this sub-section:

Section 128A shall not be applicable in following cases

Section 128A(2)

Nothing contained in sub-section (1) shall be applicable in respect of any amount payable by the person on account of erroneous refund.

Section 128A(3)

Nothing contained in sub-section (1) shall be applicable

in respect of cases where an appeal or writ petition filed by the said person is pending before Appellate Authority or Appellate Tribunal or a court, as the case may be,

and has not been withdrawn by the said person on or before the date notified under sub-section (1).

Section 128A(1)

Person pays the full amount of tax payable as per the notice/ statement/ the order referred above,

on or before 31-03-2025, as notified by the Government,

Interest/ penalty shall be waived off only if full amount of tax demanded in notice/statement/order on or before notified date.

Vide N No-21/2024-CT, Govt has notified 31-03-2025 as the date on or before which payment u/s 128(1) should be made.

Vide N No-21/2024-CT, Govt has notified following date on or before which payment should be made.

SN

Cases

Notified Date

(a)

For cases covered u/s 128(1)(a), (b) or (c)

31.03.2025

(b)

For cases covered in 1^st Proviso to Section 128A(1)

Date ending on completion of 6 months from the date of issuance of the order by PO redetermining tax u/s 73.

Section 128A(4)

Notwithstanding anything contained in this Act,

where any amount specified u/ss (1) has been paid and the proceedings are deemed to be concluded u/ss (1),

no appeal u/s 107(1) or 112(1) shall lie against an order referred to in clause (b) or clause (c) of sub-section (1), as the case may be.

Rule 164(5)

The amount payable u/sr (1) or (2) shall be

Amount payable as per notice/ statement/ order u/s 73 (-) Amount not payable as per section 16(5) or (6).

Section 128A(1)

On payment of full amount of tax within notified date

no interest u/s 50 and penalty under this Act, shall be payable and

all the proceedings in respect of the said notice or order or statement, as the case may be, shall be deemed to be concluded, subject to such conditions as may be prescribed^[R-164]:

3^rd Proviso to Section 128A(1)

where interest and penalty has already been paid, no refund of the same shall be available.

Rule 164(1)

Any person who is eligible for waiver of interest/penalty in respect of clause 128(1)(a)

i.e. notice or statement issued u/s 73(1) or (3), and where no order has been issued u/s 73(9) [i.e. u/c 128A(1)(a)]

may file an application in GST SPL-01,

providing the details of the said notice or the statement,

along with the details of the payments made in FORM GST DRC-03 towards the tax demanded

Rule 164(2)

Any person who is eligible u/s for waiver of interest/ penalty in respect of clause 128(1)

(b) an order passed u/s 73(9), and where no order has been passed u/s 107(11) or 108(1); or

(c) an order passed u/s 107(11) or 108(1), and where no order has been passed  113(1),

may file an application in FORM GST SPL 02,

providing the details of

order and

payments made towards the tax demanded:

1^st Proviso to Rule 164(2)

Payment towards such tax demanded shall be made only by crediting the amount in the electronic liability register against the debit entry created by the said order:

2^nd Proviso to Rule 164(2)

If the payment towards such tax demanded has been made through form GST DRC-03,

an application in FORM GST DRC-03A shall be filed 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.

Rule 164(6)

Any person who wishes to file an application u/sr (1) or (2),

may do so within a period of 3 months from the date notified u/s 128A(1)

1^st Proviso to Rule 164(6)

in cases referred to in the first proviso to section 128A(1),

the time limit for filing the said application shall be six months from the date of communication of the order of the proper officer redetermining such tax u/s 73.

Rule 164(7)

The application u/sr (1) or (2) shall be accompanied

by documents evidencing withdrawal of appeal or writ petition, if any, filed before any Appellate Authority, or Tribunal or Court, as the case may be,

to establish that the applicant is eligible for the waiver of interest or penalty or both, in terms of section 128A:

1^st Proviso to Rule 164(7)

where the applicant has filed an application for withdrawal of an appeal or writ petition filed before the 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 u/sr (1) or (2),

the applicant shall upload the copy of

such application or document filed for withdrawal of the said appeal or writ petition along with the application u/sr (1) or (2), and

the order for withdrawal of the said appeal or writ petition on the common portal, within 1 month of the issuance of the said order for withdrawal by the concerned authority.

Rule 164(8)

Where the proper officer is of the view that the application in SPL-01/ SPL-02 is liable to be rejected as not being eligible for waiver of interest/ penalty, as per section 128A,

he shall

issue a notice on the common portal to the applicant in GST SPL-03 within 3 months from the date of receipt of the said application and

also give the applicant an opportunity of being heard.

Rule 164(9)

On receiving the notice u/sr (8), the applicant may file a reply to the said notice on the common portal in GST SPL-04, within 1 month from the date of receipt of the said notice..

Rule 164(12)

If the proper officer is not satisfied with the reply of the applicant, the proper officer shall issue an order in FORM GST SPL-07 rejecting the said application.

Rule 164(10)

If the proper officer is satisfied that the applicant is eligible for waiver of interest and penalty as per section 128A, he shall issue an order in GST SPL-05 on the common portal accepting the said application and concluding the proceedings u/s 128A.

Rule 164(11)

In cases where the order in GST SPL-05 is issued by the proper officer u/sr (10).–

(a) in respect of application in SPL-01, summary of order in GST DRC-07, [i.e. u/r 142(5)] shall not be required to be issued by the PO,

(b) in respect of application in SPL-02, the liability created in the part II of Electronic Liability Register, shall be modified accordingly.

Rule 164(13)(a)

In cases where notice in GST SPL-03 has not been issued, the proper officer shall issue the order u/sr (10) within 3 months from the date of receipt of the application in SPL-01/ SPL-02

Rule 164(13)(b)

In cases where notice in GST SPL-03 has been issued,

the proper officer shall issue the order in s/r (10) or rule (12)

within 3 months from the date of receipt of reply in GST SPL-04, or

within 4 months from the date of issuance of notice in SPL-03 where no reply is received from the applicant.

Explanation to Rule 164(13)

For the purposes of this sub-rule,

in cases referred to in the proviso to s/r (7), [Order of withdrawal of appeal late received]

the time period from the date of filing of the application u/sr (1) or (2) till the date of submission of the order for withdrawal of the appeal or the writ, as the case may be,

shall not be included while calculating the time period u/c (a) or (b) of this sub-rule.

Rule 164(14)

If no order is issued by the proper officer within the time limit specified in sub-rule (13), then the application in FORM GST SPL-01 or FORM GST SPL-02, as the case may be, shall be deemed to be approved and the proceedings shall be deemed to be concluded.

Rule 164(15)(a)

In cases where no appeal is filed against the rejection order in GST SPL-07 within the time period specified u/s 107(1)

the original appeal, if any, filed by the applicant against the order mentioned in clause 128(1)(b) or (c), and withdrawn for filing the application in GST SPL-02 u/s 128A(3) shall be restored.

Rule 164(15)(b)

In cases where an appeal is filed against the rejection order in GST SPL-07 for rejection of SPL-01/02, if—

(i) the appellate authority has held that the proper officer has wrongly rejected SPL-01/02, the said appellate authority shall pass an order in GST SPL-06 on the common portal accepting the said application and concluding the proceedings u/s 128A; or

(ii) the appellate authority has held that the proper officer has rightly rejected SPL-01/02, the original appeal, if any, filed by the applicant against the order mentioned in clause 128(1)(b) or (c), and withdrawn for filing the application in GST SPL-02 u/s 128A(3), shall be restored, subject to condition that the applicant files an undertaking electronically on the portal in GST SPL-08, within 3 months from the date of issuance of the order by the appellate authority in FORM GST APL-04, that he has neither filed nor intends to file any appeal against the said order of the Appellate Authority.

2^nd Proviso to Section 128A(1)

In cases where

an application is filed u/s 107(3) or 112(3) or

an appeal is filed by an officer of central tax u/s 117(1) or 118(1) or

where any proceedings are initiated u/s 108(1),

against an order referred to in clause (b) or clause (c) or against the directions of the Appellate Authority or the Appellate Tribunal or the court referred to in the first proviso,

the conclusion of the proceedings under this sub-section,

shall be 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 3 months from the date of the said order:

Rule 164(16)

In cases where the taxpayer is required to pay an additional amount of tax liability as per the second proviso to section 128A(1), and

such additional payment is not made within the time limit specified in the said proviso,

the waiver of interest/ penalty, under the said section as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, if any, shall become void.

Rule 164(3)

Where the notice/ statement or order mentioned in sub-section 128A(1) includes demand of tax,

partially on account of erroneous refund and

partially for other reasons,

an application u/sr (1) or (2) may be filed only after payment of the full amount of tax demanded

on or before the date notified under the said sub-section.

Rule 164(4)

Where the notice/ statement or order mentioned in sub-section 128A(1) includes demand of tax,

partially for the period mentioned in the said sub-section and

partially for the period other than that mentioned in the said sub-section

an application u/sr (1) or (2) may be filed only after payment of the full amount of tax demanded

on or before the date notified under the said sub-section.

Rule 164(17)

In cases where the taxpayer is required to pay any amount of interest/penalty,

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),

and the details of such amount have been mentioned in GST SPL-05 or GST SPL-06,

the applicant shall pay the said amount of interest/penalty,

within 3 months from the date of issuance of the order in GST SPL-05 or GST SPL-06, as the case may be, and

where the said amount is not paid within the said time period,

the waiver of interest/penalty u/s 128A as per the order issued in FORM GST SPL-05 or FORM GST SPL-06, shall become void.

Explanation to Rule 164

For the purposes of this rule, the proper officer for issuance of order under this rule,–

(a) in cases where the application is made u/c 128A(1)(a), shall be the proper officer for issuance of order as per section 73; and

(b) in cases where the application is made u/c 128A,(1)(b) or (c) shall be the proper officer referred to in section 79 of the Act.”.

Advisory dated 08-11-2024 issued related to section 128A