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GST Amnesty Scheme 2024 – Section 128A

Introduction

The Government of India, through the Central Board of Indirect Taxes and Customs (CBIC), has introduced the GST Amnesty Scheme 2024 under Section 128A of the Central Goods and Services Tax (CGST) Act. This initiative aims to provide relief to taxpayers who have defaulted in compliance requirements, particularly concerning the cancellation and revocation of GST registrations. The scheme offers an opportunity to regularize past non-compliances and avoid severe penalties, facilitating a smoother compliance environment.

This article explores the key aspects of the GST Amnesty Scheme 2024, including the eligibility criteria, procedural guidelines, and related circulars issued by the CBIC.

1. Legislative Framework – Section 128A of the CGST Act

Section 128A of the CGST Act was introduced to empower the Government to waive or reduce penalties and extend compliance relief under special circumstances. This provision has been leveraged to announce the GST Amnesty Scheme 2024, providing relief for various GST-related non-compliances.

Key highlights of Section 128A:

  • Allows waiver or reduction of late fees and penalties.
  • Enables special relaxations for specified non-compliances.
  • Delegates authority to issue notifications and circulars for implementation.
  • Facilitates the reinstatement of cancelled GST registrations.

2. Scope of the GST Amnesty Scheme 2024

The scheme covers multiple aspects of GST compliance, particularly targeting businesses whose registrations were cancelled due to non-filing of returns. It provides an opportunity for such taxpayers to apply for restoration with a reduced late fee.

Key Areas Covered:

  1. Revocation of Cancelled GST Registration
    • Taxpayers whose GST registrations were cancelled due to non-filing of returns within the prescribed time limit can apply for revocation.
    • Reduced penalties and late fees apply to eligible taxpayers.
  2. Late Fee Waiver for Non-Filers of Returns
    • Relief is provided in the form of a waiver or reduction of late fees for past GST return non-compliance.
  3. Relief for Pending Assessments
    • Taxpayers facing show cause notices or assessment proceedings due to past non-compliances may benefit from relaxed penalty provisions.

3. Rules and Procedure for Availing Amnesty

The GST Amnesty Scheme 2024 is governed by specific rules and procedural requirements. Taxpayers must adhere to the following steps to avail benefits under the scheme:

Step 1: Verification of Eligibility

  • Only taxpayers whose GST registration was cancelled before 31st December 2023 due to non-filing of returns are eligible for the amnesty.
  • The amnesty is applicable for revocation applications filed up to 30th June 2024.

Step 2: Application for Revocation of Cancellation

  • Taxpayers need to file an application for revocation of cancellation in Form GST REG-21.
  • The application must be submitted on the GST portal along with a valid reason for non-compliance and an undertaking to file all pending returns.

Step 3: Filing of Pending Returns

  • All pending GST returns (GSTR-1, GSTR-3B, and GSTR-9) up to the cancellation date must be filed before applying for revocation.
  • Payment of outstanding taxes, interest, and reduced late fees as per the amnesty scheme is mandatory.

Step 4: Processing of Application by Authorities

  • The GST officer reviews the application and verifies compliance.
  • If the application is in order, the officer issues an order in Form GST REG-22 revoking the cancellation.

Step 5: Compliance Post-Revocation

  • Taxpayers must ensure continuous GST compliance post-revocation to avoid future cancellations.
  • Monthly returns must be filed regularly, and any pending liabilities must be cleared.

4. Latest Updates and Related Circulars

The CBIC has issued various circulars and notifications to facilitate the smooth implementation of the amnesty scheme. Some of the key circulars include:

  • CBIC Notification No. 03/2024 – Central Tax, issued on 5th March 2024, outlining the procedural aspects of revocation.
  • Circular No. 192/04/2024-GST, providing clarifications on eligibility, documentation, and timelines.
  • Updates on the GST portal for streamlined processing of amnesty applications.

5. Impact and Benefits of the Amnesty Scheme

The GST Amnesty Scheme 2024 aims to promote voluntary compliance and reduce litigation arising from past non-compliances. The key benefits include:

For Taxpayers:

  • Reinstatement of cancelled GST registrations.
  • Reduction in penalties and late fees.
  • Opportunity to avoid legal proceedings and interest liabilities.
  • Improved compliance history and eligibility for future credit claims.

For the Government:

  • Increased tax collection through voluntary compliance.
  • Reduction in disputes and litigation.
  • Enhanced taxpayer participation in GST reforms.

6. Key Considerations and Challenges

While the amnesty scheme provides substantial relief, taxpayers should be mindful of the following challenges:

  • Strict Timelines: Applications must be submitted before 30th June 2024.
  • Pending Dues: Full payment of outstanding liabilities is necessary to avail of the benefits.
  • Future Compliance: Continuous filing of returns is essential post-revocation to prevent repeat cancellations.

7. Conclusion

The GST Amnesty Scheme 2024 under Section 128A provides a much-needed relief mechanism for businesses struggling with GST non-compliance issues. By offering reduced penalties and a streamlined revocation process, the scheme facilitates re-entry into the GST system for affected taxpayers. It is imperative for businesses to take advantage of this opportunity before the deadline and ensure long-term compliance to avoid future complications.

Tax professionals and businesses must stay updated with CBIC notifications and proactively address past non-compliances under this scheme. This initiative reflects the Government’s commitment to easing the compliance burden while reinforcing the importance of adherence to GST laws.

Disclaimer: The information provided in this article is for educational purposes only and should not be construed as legal advice. Taxpayers are advised to consult their GST practitioners for specific guidance.

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