The newly introduced Section 11A of the GST Act 2017 will be applied only in "rarest of the rare cases" to offer retrospective Goods and Services Tax (GST) relief, clarified Revenue Secretary Sanjay Malhotra after the GST Council's meeting on September 9. He stressed that Section 11A is not intended for general use and that no formal discussion on issuing a circular regarding its application took place during the meeting.
Section 11A, introduced through an amendment, is designed to shield businesses from hefty retrospective tax demands. This provision is seen as a potential relief for sectors such as real-money gaming (RMG), which is grappling with significant GST liabilities from July 1, 2017, to March 31, 2023.
The GST Council had initially proposed the inclusion of Section 11A during its June meeting as a legal safeguard for businesses facing retrospective tax claims. However, Malhotra emphasized that the detailed guidelines, which will clarify the implementation of the section, are still pending approval.
This move comes in the wake of the Union Finance Ministry’s report last December that highlighted over 71 show-cause notices issued to online gaming companies, alleging GST evasion of more than ₹1.12 lakh crore.
Once finalized, the circulars are expected to reduce litigation, offering businesses a clearer understanding of tax compliance and easing long-standing disputes, ultimately enhancing the ease of doing business in India.
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