Rectification under GST Amnesty Scheme 2024: 5 Things to Note for Taxpayers Seeking Past ITC Claims
Here is a comprehensive look at the scheme’s key points, the mandatory conditions, and how you can benefit before the April 8, 2025, deadline
Introduction In a major relief to Goods and Services Tax ( GST ) payers, the government has rolled out an Amnesty Scheme allowing taxpayers to rectify and claim pending Input Tax Credit ( ITC ) for Financial Years ( FY ) 2017-18, 2018-19, 2019-20, and 2020-21. Many taxpayers were previously unable to claim ITC due to GSTR-3B filing deadlines, leading to inflated tax liabilities and...
Introduction
In a major relief to Goods and Services Tax ( GST ) payers, the government has rolled out an Amnesty Scheme allowing taxpayers to rectify and claim pending Input Tax Credit ( ITC ) for Financial Years ( FY ) 2017-18, 2018-19, 2019-20, and 2020-21. Many taxpayers were previously unable to claim ITC due to GSTR-3B filing deadlines, leading to inflated tax liabilities and subsequent GST demand notices. This new online rectification process—effective from January 7, 2025—aims to nullify such demand orders and credit the overdue ITC to taxpayers’ GST ledgers.
1. Background: Why This Amnesty Scheme Matters
- Past ITC Restrictions:
○ Under GST law, taxpayers cannot claim ITC without filing GSTR-3B returns on time.
○ Missing the deadline led to disallowance of ITC, causing increased output tax liabilities. - Demand Notices Issued:
○ Many taxpayers received GST demand notices for non-filing or late filing of GSTR-3B.
○ These notices confirmed a higher tax liability due to the unclaimed ITC. - Budget 2024 Announcement:
○ Recognizing these challenges, the government introduced the GST Amnesty Scheme in Budget 2024 to allow rectification of past returns and re-claim ITC.
○ A subsequent circular, issued on October 8, 2024, laid out the procedure to implement this Amnesty Scheme.
2. Key Highlights of the Amnesty Scheme
- Who Can Benefit:
○ Taxpayers who filed GSTR-3B returns for FY 2017-18, 2018-19, 2019-20, and 2020-21 on or before November 30, 2021.
○ Taxpayers facing demand notices under sections 73 or 74 (or orders under sections 107 or 108) for wrongfully availing ITC outside the time limit in Section 16(4). - What It Does:
○ Allows taxpayers to file an online rectification application to re-claim past ITC disallowed solely because of late returns.
○ Once approved, the related tax demand is reduced to “Nil,” and the denied ITC is credited to the taxpayer’s GST ledger. - Deadline:
○ Rectification requests must be filed within six months from October 8, 2024.
○ Final date to apply: on or before April 8, 2025. - Processing Time:
○ The GST proper officer will process the rectification application within three months of filing.
○ Once processed, the ITC is reinstated in the taxpayer’s ledger.
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3. Step-by-Step Guide to File the Rectification Application
According to the GSTN advisory (dated January 7, 2025), here is how you can apply for rectification and reclaim your pending ITC:
- Login to GST Portal
○ Visit www.gst.gov.in and log in with valid credentials.
○ Navigate to Dashboard > Services > User Services > My Applications. - Select Application Type
○ In the “Application Type” field, choose Application for rectification of order.
○ Click the NEW APPLICATION button. - Fill in Required Details
○ Download the proforma in Annexure A (available in Word format) directly from the portal.
○ Enter details of your demand order and the ITC wrongly availed.
○ Upload the completed Annexure A while filing the online application. - Preview & File
○ Click PREVIEW to verify your application.
○ Once satisfied, submit the rectification application by clicking FILE. - Await Processing
○ The GST officer will process your rectification within three months.
○ On approval, your past GST demand will be nullified, and the pending ITC will be credited to your GST ledger.
4. What the Finance Ministry Says
In its October 8, 2024, circular, the Ministry of Finance announced:
“...hereby notifies the following special procedure for rectification of order, to be followed by registered persons against whom any order under section 73 or section 74 or section 107 or section 108 of the said Act has been issued confirming demand for wrong availment of input tax credit… but where such input tax credit is now available as per sub-section (5) or sub-section (6) of section 16 of the said Act...”
In other words, if your ITC was disallowed due to late filing but is now deemed valid under the newly added Sections 16(5) and 16(6), you can rectify and reclaim it—provided no appeal has been filed against the original order.
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5. Action Points for Taxpayers
● Check Eligibility:
Verify that your GSTR-3B for FY 2017-18 through 2020-21 was indeed filed on or before November 30, 2021.
● Collect Documentation:
Keep ready all demand notices, tax orders, and relevant ITC records to accurately fill in Annexure A.
● File Before April 8, 2025:
Remember, the window to apply for this rectification is strictly six months from October 8, 2024.
● Follow Up:
Monitor the status of your application after submission. Once processed, confirm that your ITC ledger reflects the credited amount and that any pending demand is canceled.
Bonus Point: The Catch
You cannot claim this relief if your GSTR-3B for the specified tax periods was not filed by November 30, 2021.
Also, the ITC you get back cannot be refunded directly to your bank account; it can only be used to offset present or future GST liabilities.
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Final Word
The GST Amnesty Scheme 2024 provides a much-needed lifeline for taxpayers who missed out on claiming legitimate ITC due to filing delays. By taking advantage of the newly available online rectification process, businesses stand to reduce or eliminate inflated tax demands and strengthen their cash flow. However, action is time-sensitive—so if you meet the criteria, file your application at the earliest to reclaim your rightful ITC and avoid any further compliance setbacks.
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