Appeal for Early Hearing to Waive GST Interest & Penalties – Section 128A
On November 1, 2024, the Indian government introduced Section 128A of the Central Goods and Services Tax (CGST) Act, 2017. This new section allows taxpayers to receive conditional waivers on interest and penalties for specific tax liabilities under Section 73, provided they pay the full tax amount by March 31, 2025. This opportunity is designed to ease the financial burden on taxpayers by giving them a chance to settle certain tax demands from the period July 1, 2017, to March 31, 2020, without additional charges.
To assist taxpayers with these waivers, Rule 164 of the CGST Rules also came into effect on November 1, 2024. This rule outlines the procedures and conditions for the waiver, making it simpler for businesses to manage their tax obligations.
When Does Section 128A Apply?
The waiver applies in specific situations where taxpayers have received notices, statements, or orders but have not fully settled their dues. These include:
- Pending Notices or Statements: If a taxpayer received a notice under Section 73(1) or a statement under Section 73(3) for the relevant tax periods but no final order was issued, they can qualify for the waiver by paying the full tax amount demanded.
- Adjudicated Orders Without Further Appeals: For cases where an order was issued under Section 73(9) but no further appeal or revision order was passed, taxpayers can benefit from the waiver by paying the total outstanding tax.
- Orders from Appellate or Revisional Authorities: If an order was passed by an appellate authority (under Section 107(11)) or revisional authority (under Section 108(1)) but has not yet been further appealed, taxpayers can obtain the waiver by settling the tax liability.
- Re-determined Cases: In cases initially issued under Section 74 due to suspected fraud or suppression, if a higher authority directs that the tax be re-determined under Section 73 instead, taxpayers may qualify for the waiver if fraud was not proven.
Steps to Avail the Waiver
The GST Network (GSTN) issued an advisory on November 8, 2024, explaining that the forms needed to request waivers—Form GST SPL-01 and Form GST SPL-02—will be available on the GST portal by early January 2025. In the meantime, GSTN advises taxpayers to pay any demanded tax before March 31, 2025, to qualify for the waiver.
Why Request an Early Hearing?
In many cases, the tax demands issued during this period were determined without fully verifying the documentation provided by taxpayers. For appeals pending with authorities, there is a chance that the tax demands could be reassessed, potentially for a lower amount. Taxpayers may also request an early hearing if their case was assessed under Section 74 (fraud/suppression) without sufficient grounds. If re-assessed under Section 73, they could qualify for the waiver benefits since Section 128A does not apply to cases involving fraud.
Draft Request Letter for Early Hearing
Here is a simplified draft of a letter taxpayers can use to request an early hearing with the appellate authority to expedite their case and take advantage of the waiver:
[Company Letterhead]
Date: ___________
To
The First Appellate Authority,
[Address of the First Appellate Authority]
[City, State, Pin Code]
Subject: Request for Early Hearing of Appeal – Waiver of Interest & Penalties under Section 128A of CGST Act, 2017
Dear Sir/Madam,
We, [Company Name], GSTN No: [GST Number], located at [Business Address], respectfully submit that an appeal has been filed with your office against the order issued by [Issuing Authority], Order No: ___________, dated ___________.
Our appeal, filed under ARN No: ___________, dated ___________, is pending before you. We kindly request an early hearing of the appeal so we may benefit from the waiver of interest and penalties under Section 128A of the CGST/SGST Act, 2017, as per Rule 164 of the CGST/SGST Rules, 2017. This waiver would help us fulfill our statutory dues without additional financial strain.
We sincerely request your consideration in expediting the hearing process to enable us to benefit from the relief provisions.
Thank you for your attention.
Yours faithfully,
[Authorized Signatory’s Name]
[Designation]
[Company Name]
[Contact Information]
