CBIC Issues Clarifications on Issues Related to Availing Benefit under S.128A of CGST Act [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC) has issued a detailed clarification on various issues related to the availment of benefits under Section 128A of the Central Goods and Services Tax (CGST) Act, 2017.

The clarification issued on March 27, 2025 aims to address concerns raised by the trade and industry regarding the implementation of this provision, which was introduced based on the recommendations of the GST Council in its 53rd and 54th meetings.

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Section 128A was inserted into the CGST Act, along with Rule 164 in the CGST Rules, with effect from November 1, 2024, to provide for a waiver of interest or penalty or both in cases where demands were raised under Section 73 for the period from July 1, 2017, to March 31, 2020.

The government had earlier issued Circular No. 238/32/2024-GST on October 15, 2024, clarifying aspects related to the implementation of these provisions. However, concerns regarding certain procedural and eligibility issues continued to remain.

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Several representations were received by the CBIC from industry stakeholders regarding difficulties faced in availing the benefit of Section 128A, primarily pertaining to the eligibility of cases for benefit under Section 128A, where payment was made through the return in FORM GSTR-3B instead of FORM GST DRC-03 and the treatment of appeals covering periods beyond the scope of Section 128A.

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In response, the Board has now provided further clarification to ensure uniform implementation of the law:

The first issue addressed in the circular pertains to whether taxpayers who had already paid their tax dues through FORM GSTR-3B before the introduction of Section 128A would be eligible for the benefit.

The CBIC has clarified that any tax payments made through FORM GSTR-3B before November 1, 2024, will be considered valid for availing the benefit under Section 128A, provided such payments were intended to settle the demand. However, for payments made after this date, the prescribed method under Rule 164 must be followed, requiring payments through FORM GST DRC-03. The eligibility of such cases will be subject to verification by the proper officer.

The second issue clarified concerns situations where a taxpayer has received a notice, statement, or adjudication order covering both periods within and beyond the scope of Section 128A. In such cases, the Board has allowed taxpayers to avail the benefit under Section 128A without withdrawing appeals for periods outside its purview.

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The taxpayer has the liberty to submit FORM SPL-01 or FORM SPL-02, as applicable, after making the required tax payment for the period covered under Section 128A. Upon submission of this form, the taxpayer must inform the appellate authority or Tribunal that they wish to avail the benefit and do not intend to pursue the appeal for the relevant period.

The appellate authority or Tribunal shall then issue an appropriate order for the remaining period not covered under Section 128A. The clarification issued in point 6 of the table in Circular No. 238/32/2024-GST, which previously addressed this issue, has now been withdrawn.

The CBIC Circular, undersigned by Gaurav Singh, Commissioner (GST) has directed that suitable trade notices be issued to publicize these clarifications while also inviting feedback on any difficulties faced in the implementation of the circular.

To Read the full text of the Circular CLICK HERE

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