GST waiver scheme: department to withdraw appeals on interest or penalty

In short: FPAC

FFacts

Instruction No. 02/2025-GST dated 7th February, 2025 deals with department appeals filed only against interest and/or penalty in cases linked to Section 128A of the CGST Act, 2017.

PProvisions and law

Section 128A of the CGST Act, 2017 read with Rule 164 of the CGST Rules, 2017, waiver of interest or penalty or both for Section 73 demands for Financial Years 2017-18, 2018-19 and 2019-20, and Circular No. 238/32/2024-GST dated 15th October, 2024.

AAnalysis

Where the taxpayer has fully paid the tax on a Section 73 demand and the department is in appeal or about to appeal only on wrong interest calculation or wrong imposition or non-imposition of penalty under the CGST Act or IGST Act, the proper officer may withdraw such appeal, and accept the order if it is only at review stage.

CConclusion

A pending department appeal on interest or penalty alone should not block your Section 128A waiver if tax is fully paid and other conditions are met.

What to do

1. InformationCheck your Section 73 demands for FY 2017-18, 2018-19 and 2019-20 and confirm the full tax amount has been paid.
2. DiscussionAsk your CA whether a pending or proposed department appeal in your case is only about interest calculation or penalty.
3. FormsComplete the Section 128A waiver application under Rule 164 along with the other conditions prescribed.
4. DeliverablesKeep the waiver record and the proof of full tax payment for any future departmental query.

Steps follow IDFD: Information, Discussion, Forms, Deliverables.