On October 8, 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 20/2024 – Central Tax, introducing amendments to the Central Goods and Services Tax (CGST) Rules, 2017, under Rule 164. The amendments, effective from November 1, 2024, outline the procedure for closure of proceedings under Section 128A in relation to demands raised under Section 73. This new rule is a significant step in streamlining the process for waiving interest and penalties for taxpayers.
Key Highlights of Rule 164
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Electronic Filing for Waiver: Taxpayers eligible for a waiver of interest, penalty, or both, can now file an application electronically via FORM GST SPL-01 for notices under Section 73 or FORM GST SPL-02 for orders. These forms must include details of payments made through FORM GST DRC-03.
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Eligibility and Conditions: The waiver procedure applies to demands raised due to erroneous refunds or other reasons, but only after full payment of the demanded tax. Taxpayers must withdraw any appeals or petitions filed before the waiver application is processed.
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Time Limit for Filing: Applications for waiver must be submitted within three months from the notified date, with a six-month window for specific cases involving redetermined tax amounts.
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Officer Review and Approval: Proper officers will review the applications and issue an order either accepting or rejecting the request. If no response is given within the stipulated time, the application will be deemed approved.
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Appeal Withdrawal Requirement: To qualify for the waiver, taxpayers must provide evidence of withdrawing any pending appeals or writ petitions related to the demand.
Impact on Taxpayers
The new procedure under Section 128A is designed to ease the financial burden on taxpayers by providing a clear path for waiving interest and penalties on GST demands. This amendment is especially beneficial for businesses facing large tax demands, as it allows them to resolve disputes without the additional financial strain of penalties and interest.
The changes also introduce a level of transparency and efficiency in the GST dispute resolution process, making it easier for businesses to comply with the law and manage their tax liabilities effectively.
Conclusion
This update marks a positive move towards simplifying GST compliance and reducing the burden on taxpayers. Businesses are encouraged to review the new procedures to take full advantage of the waiver provisions starting from November 1, 2024.
Official copy of the notification has been attached
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