Summary
CBIC Circular No. 248/05/2025-GST: Clarification on Section 128A Waiver
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 248/05/2025-GST dated 27 March 2025, issued clarifications regarding the waiver of interest or penalty, or both, under Section 128A of the CGST Act, 2017.
Section 128A provides relief in specified cases involving demands under Section 73 for the period from 1 July 2017 to 31 March 2020, subject to fulfilment of the prescribed conditions.
1. Tax Paid Through GSTR-3B Before 1 November 2024
CBIC clarified that taxpayers who paid the demanded tax through FORM GSTR-3B before 1 November 2024 may also be eligible for the benefit under Section 128A.
The payment must have been made towards the relevant demand before the specified date and is subject to verification by the proper officer. The clarification also covers qualifying payments made before issuance of the demand notice or adjudication order.
However, taxpayers seeking the benefit on or after 1 November 2024 must follow the payment procedures prescribed under Rule 164 of the CGST Rules, 2017.
2. Demands Covering Both Eligible and Non-Eligible Periods
Where a notice, statement or order covers both the period eligible under Section 128A (FY 2017-18 to FY 2019-20) and periods outside it, the taxpayer is not necessarily required to discharge the tax demand for the entire combined period or withdraw the appeal for every period.
The taxpayer may apply in FORM GST SPL-01 or FORM GST SPL-02, as applicable, after paying the tax liability for the period covered by Section 128A.
After filing the application, the taxpayer must inform the Appellate Authority or Appellate Tribunal, as applicable, that the benefit of Section 128A is being sought and that the appeal will not be pursued for the period covered by that section.
The appellate authority or tribunal may then pass an appropriate order concerning the remaining period outside the Section 128A coverage.
3. Earlier Clarification Withdrawn
CBIC has withdrawn the clarification previously issued under Point 6 of the table in paragraph 4 of Circular No. 238/32/2024-GST dated 15 October 2024, in view of the revised clarification concerning demands covering both eligible and non-eligible periods.
4. Practical Implications for Taxpayers
Taxpayers considering the Section 128A waiver should review:
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Whether the demand relates to the eligible period from 1 July 2017 to 31 March 2020.
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Whether the tax has been paid in full as required under the applicable provisions.
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Whether an earlier payment through GSTR-3B was made before 1 November 2024 and can be linked to the relevant demand.
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Whether the demand covers additional periods outside Section 128A and requires an appropriate application and communication to the appellate authority.
Eligibility depends on the applicable statutory conditions, prescribed procedure and verification of the relevant records.
5. Official Reference
CBIC Circular No. 248/05/2025-GST dated 27 March 2025.
Need Assistance with a GST Demand or Waiver Application?
If you have a GST demand involving the period covered by Section 128A, a review of the demand order, payment records and appeal status may help determine whether the waiver provisions are applicable to your case.
Contact Taxation360 for professional assistance.
Disclaimer: This article is for general informational purposes only and does not constitute case-specific legal advice.