How to Apply for Waiver of Interest and Penalties on GST Portal?

Taxpayers who have missed reporting deadlines or made late payments under the GST system benefit greatly from the waiver of interest and fines. It lets companies normalise their pending compliance problems without significant financial repercussions. By reducing lawsuits and encouraging voluntary compliance, this supports a clear and effective tax system for government agencies at large as well as business establishments.

What is GST Amnesty Scheme?

To assist the taxpayers who haven’t filed their GST returns or paid their taxes on schedule, the Government of India has introduced a unique relief plan called the GST Amnesty Scheme. This initiative lets the taxpayer submit their late returns within a set period while paying any tax owed and offers waivers or discounts on penalties, interest, and late fees. Small and medium-sized taxpayers wishing to correct historical mistakes and return into compliance without incurring significant financial penalties are especially helped by the program.

Eligibility for GST Amnesty Scheme

1. GST Taxpayers: GST taxpayers are those registered under the GST Act, including regular, composition, and casual taxpayers. The scheme is open to both active and inactive registrations, which have pending returns for the period as specified.
2. Inability to submit GST returns such as GSTR-3B, GSTR-1, or GSTR-9 on time: The amnesty policy usually covers these late or missed submissions starting from July 2017 until the date specified by the government.
3. Pending Tax Liability: This means I need to pay all my back taxes in full to be eligible for a waiver. The amnesty is extended only to interest and penalties, not to the principal tax amount. For this benefit, one needs to pay the taxes on time.
4. Compliance within Amnesty Period: All the outstanding returns and payments have to be made within the amnesty period, which is the specific timeframe announced under the scheme. Anything submitted or paid after this period will not be granted relief.
5. No Involvement in Fraud or Misstatement: If the taxpayer is currently under investigation or facing proceedings for fraud, tax evasion, or willful misstatement, he will not qualify under the scheme. It is designed only for genuine cases of delay or unintentional non-compliance.
6. Encouragement of Voluntary Compliance: The scheme encourages the voluntary rectification of past defaults and helps me to achieve full compliance with the GST law.

Conditions to Apply For GST Amnesty Scheme

1. To be eligible, one should have a valid GST registration in their name. The scheme shall be applicable for both regular and composition taxpayers who have not filed their returns within the prescribed time limit.
2. The waiver will be applicable only when he has pending GST returns (GSTR-3B, GSTR-1, or GSTR-9) for previous tax years, normally from July 2017. He can avail the benefit of only those returns which are filed during the notified amnesty period.
3. To avail the amnesty benefit, all pending returns must be filed within the time prescribed by the government. If delayed beyond the due date of the scheme, he automatically loses the benefits accruing from the waiver.
4. The entire tax liability needs to be settled, as the scheme does not waive the principal tax amount. He needs to pay the total tax due, while the government may waive or reduce interest, late fees, or penalties as per the notification.
5. If he is under investigation or facing proceedings relating to fraud, willful misstatement, or tax evasion, he is not eligible for the amnesty benefits. The scheme applies only to genuine or unintentional non-compliance.
6. After filing pending returns and settling dues, he needs to ensure timely compliance in future tax periods, failing which my registration shall be cancelled, or further penalties may be attracted in that case.

By meeting these conditions and filing all pending returns in time, paying up the tax dues, and proving that his default was genuine, he shall be eligible to avail the GST Amnesty Scheme. This helps him in easing his financial burden, clearing past liabilities, and restoring complete compliance under GST law.

Procedure to Apply for Waiver of Interest and Penalties on GST Portal

This document is a step-by-step guide and provides a detailed procedure to be followed for applying for a waiver of interest and penalty under the Central Goods and Services Tax Act, 2017, through the GST Portal in India. It includes eligibility criteria, steps to follow, timelines, and relevant remarks.

Step 1: Log in and navigate

• Log in with your GST credentials to the GST Portal: https://www.gst.gov.in.
• Go to Services > User Services > My Applications.
• Select “Apply for Waiver Scheme under Section 128A” from the “Application type” drop-down menu.

Step 2: Select the relevant form and begin the application

• In case of notice or statement under Section 128A(1)(a), use Form GST SPL-01.
• Select Form GST SPL-02 for orders under Section 128A(1)(b) or (c).
• Click on “Create Application.” You will be brought to a questionnaire or form that you should fill out. It will capture information related to the demand/notice/order.

Step 3: Fill in the required details

Please provide the following information: demand, notice, or order number, date, and the amount of tax owed.

• Payment details are to be provided, stating where and when the tax (principal) was paid, through ELR or DRC-03. If the payment is by DRC-03, this may need to be linked with Form GST DRC-03A.
• If an appeal or writ has been filed, include information concerning the withdrawal or application for withdrawal. A declaration confirming eligibility (non-fraudulent, etc) of the case is also needed.

Step 4: Upload necessary documents

Evidence of payment of tax demand: attach a screenshot of the ELR ledger entry or payment voucher.

• Upload withdrawal application or order of appeal/writ, if any.
• Ensure the correct copy of the demand/notice/order is available.

Step 5: Submit the application

• Make sure all entries are accurate and complete.
• Submit your application. You will receive an acknowledgement from the portal after submission.

Step 6: Officer review and order issuance

The application would be examined by a “Proper Officer” as defined in Rule 164. He may call for clarification and/or grant an opportunity to be heard within a period of three months from the receipt of the application through a notice in Form GST SPL-03. In response to the notice, the applicant may file a reply in Form GST SPL-04 within a month. If the officer is satisfied, he will issue an order in Form GST SPL-05, closing the proceeding. In case the application is rejected, the order would be in F.

Key Points to Ensure and Common Pitfalls

• Ensure that the tax demand falls under Section 73 (not Sections 74/76 for fraud/suppression), as only non-fraud demands are permissible.
• To avoid losing eligibility, the entire tax demand has to be paid, not just a part, before the due date.
• In case you have an appeal, withdraw it to be certain that your application will be accepted.
• Select the appropriate form for your notice, statement, or order. A wrong selection may result in its rejection.
• Link any DRC-03 payments to DRC-03A before submitting the application. If this is not done, your payment may not meet the demand.
• Keep clear documentation and internal records of all steps taken: payment proofs, portal screenshots, demand number, withdrawal of appeal, etc. – a good audit trail is helpful.
• Monitor the status in the portal after its submission. In case you get notice of SPL-03, respond immediately within one month.
• Be aware of the window of time: Failure to file on time, three or six months as may apply, may result in a bar.

Benefits of GST Amnesty Scheme

1. Reduced Financial Burden: Interest, penalties, and late fees are eliminated or reduced by the system, easing the financial burden that taxpayers are under.
2. Assure Compliance: Filing all pending GST returns enables full compliance without attracting any penalties.
3. Avoiding Litigation: By making use of the scheme, non-filing of tax returns will not lead to litigation, notices, or cancellation of the GST registration.
4. Restoration of Input Tax Credit (ITC): Filing overdue returns within the scheme period improves cash flow by restoring ITC eligibility.
5. Encourages timely compliance: The scheme induces the taxpayer to pay their dues on time in future.
6. Support for Business Continuity: Minimises backlogs, avoids penalties, and assures smooth GST operations.

Conclusion

The waiver of interest and penalties under the GST Amnesty Scheme is a critical opportunity for taxpayers to correct previous non-compliance and restore their status within the GST regime. The scheme ensures equity and increases voluntary compliance with the tax system by offering relief from the financial burdens associated with late filings or payments. It encourages businesses to comply with their outstanding obligations and avoid future disputes while maintaining good compliance records. In summary, the trust between taxpayers and authorities is enhanced through the GST Amnesty Scheme, leading to easier, more transparent, and harmonious relations in the tax administration environment.

Related Services

• GST Return Filing
• GST Annual Return Filing
• Respond to GST Notices