GST Amnesty Scheme 2024 for waiver of interest and penalty

The GST Amnesty Scheme 2024, introduced under Section 128A of the Central Goods and Services Tax (CGST) Act, is a significant initiative by the Indian government aimed at reducing GST compliance burdens for taxpayers. Option is available form November 1, 2024, this scheme focuses on waiving penalties and interest for eligible taxpayers who resolve their outstanding GST liabilities for tax periods from July 1, 2017, to March 31, 2020.

This article provides an in-depth understanding of the GST Amnesty Scheme 2024, its provisions, eligibility, benefits, and application process, while addressing its broader impact on taxpayers and the GST ecosystem.

What Is the GST Amnesty Scheme 2024?

The GST Amnesty Scheme is a relief measure allowing taxpayers to address GST-related discrepancies without incurring significant penalties or interest. The scheme primarily applies to businesses and individuals who have received GST notices and orders under Section 73 for non-fraudulent cases, such as unintentional errors, or tax payment and interest payment lapses.

The scheme also covers cases where the GST notice was initially issued under Section 74 (for fraudulent activities) but later reclassified under Section 73 (non-fraudulent cases). This ensures fairness for taxpayers who were wrongly categorized in earlier proceedings.

Key Highlights of the Scheme

1. Waiver of Interest and Penalties

Under the GST Amnesty Scheme 2024, taxpayers can avail of a full waiver of interest and penalties, provided they settle their outstanding tax liabilities by March 31, 2025. However, the scheme does not reduce the actual tax amount due or refund penalties and interest already paid.

2. Who are Eligible to avail benefits of section 128A

The scheme is open to:

• Taxpayers with GST notices and orders issued under Section 73 for the tax periods from 2017-18 to 2019-20 by the concerned GST officer.
• Orders issued by the appellate authority and revision authority.
• Appeal pending before the appellate tribunal, and courts where order is not passed.
• Cases under section 74 and reassessment has occurred, and direction has been issued to the department for  reclassification as non-fraudulent under Section 73.

3. Inclusion of Misclassified Cases

If a GST notice was incorrectly issued under Section 74 for fraud, the taxpayer must ensure the proceedings are re-initiated under Section 73 to avail the benefits of the scheme. This correction is mandatory to qualify for the scheme’s benefits.

4. Timelines for Resolution

• Tax Payment Deadline: All tax dues must be cleared by March 31, 2025. In case of direction is issued to rectify the order by the by the appellate authority, appellate tribunal, or court then the time limit to make the payment is 6 months from the date of passing such order.
• Application Deadline: Applications under the scheme must be submitted by June 30, 2025.
• In case of direction is issued to the department to re determine the tax and other amounts  by the appellate authority, or courts then the time limit to make the payment and file application is 6 months from the date of communication of such order by the department.

Application Process

Taxpayers must follow a systematic process to avail of the scheme’s benefits:

Step 1 : File pending returns

The dealer should ensure to file GST returns which are pending for the period for which application is intended to be filed.

Step 1: Pay Outstanding Taxes

Before applying for the waiver, taxpayers must clear all pending tax liabilities through Form GST DRC-03. This ensures that only penalties and interest remain eligible for waiver.

Step 2: Submit Application Forms

Depending on the nature of the GST notice or order, taxpayers must submit the appropriate forms:

• Form GST SPL-01: For GST notices issued under Section 128A(1)(a).
• Form GST SPL-02: For orders passed under Section 128A(1)(b) or Section 128A(1)(c) and for orders issued as a result of direction of the court.

Step 3: Withdraw Appeals

If the taxpayer has filed appeals or writ petitions concerning the GST notice or order, they must withdraw them before applying under the scheme. Proof of withdrawal should be attached with the application.

In case the withdrawal is not approved till the date of filing the application U/s.128, then the acknowledgment for proof of submission of withdrawal application should be attached.

Step 4: Apply Separately for Each GST Notice or order. 

For multiple GST notices and order , taxpayers must file separate applications, ensuring that all discrepancies such notices and orders are resolved individually.

Step 5: Ensure Re-initiation for Misclassified Notices

If a GST notice was wrongly initiated under Section 74, the taxpayer must confirm that the authorities have reclassified and restarted proceedings under Section 73 to qualify the under this scheme.

Benefits of the GST Amnesty Scheme

The GST Amnesty Scheme 2024 offers several advantages:

1. Financial Relief

The scheme eliminates penalties and interest, which can significantly reduce the financial burden on taxpayers. The scheme also reduces major cost involved in GST litigation through tribunal and courts.

2. Simplification of GST Compliance

By resolving outstanding GST notices, businesses can clear compliance backlogs and focus on maintaining active GST registration status.

3. Help for Small Businesses and Startups

Small businesses and startups, which faced challenges during the initial years of GST, can rectify errors without worrying about hefty penalties.

4. Encouragement to continue business

Regularizing GST compliance ensures businesses to continue its operations, which would otherwise closed due to hefty interest and penalties, this amnesty scheme will enable them to operate without disruptions.

5. Reduction in Litigation

Resolving pending GST cases reduces the workload on courts and appellate bodies, ensuring faster resolution of disputes between the dealer and the department.

6. Fair Treatment for Reassessed Cases

Taxpayers whose cases transitioned from fraudulent (Section 74) to non-fraudulent (Section 73) are included, promoting fairness and transparency.

Broader Impact on Taxpayers

The GST Amnesty Scheme 2024 has a significant impact on various taxpayer categories:

1. Businesses with Compliance Gaps

The scheme provides a lifeline for businesses that struggled with compliance during GST’s initial years, allowing them to regularize their GST registration and address past GST notices.

2. Reassessed Cases

Taxpayers who were wrongly categorized under fraud provisions now have a fair opportunity to resolve their cases without penalties.

3. SMEs and Startups

Small businesses and startups, which were particularly vulnerable to GST compliance challenges, can resolve their issues and focus on growth.

Key Deadlines

• March 31, 2025: Final date for paying outstanding taxes.
• June 30, 2025: Last date to submit applications under the scheme.

Conclusion

The GST Amnesty Scheme 2024 is a proactive and inclusive measure to help taxpayers resolve past GST issues while fostering a culture of compliance. By addressing procedural errors, providing relief on GST notices, and encouraging active GST registration, the scheme simplifies compliance and reduces litigation.

Taxpayers must act promptly, meet deadlines, and ensure their applications are complete to maximize the benefits. This scheme is not just an opportunity to resolve disputes but also a step toward building trust between taxpayers and the government.