Big GST relief in budget 2024: No need to pay interest and penalty for these GST notices

Budget 2024 brings GST notice relief – learn how you can avoid interest and penalties. Connect with a trusted CA in Udaipur or renowned GST consultant to navigate the changes

Conditional Waiver of Interest and Penalty for FY 2017-18 to 2019-20

Recognizing initial GST implementation challenges, the Finance Bill introduces Section 128A, which provides a waiver of interest and penalties for non-fraudulent taxpayers being assessed under Section 73 for the periods FY 2017-18, 2018-19, and 2019-20. The waiver of interest and penalty is conditional and is subject to payment of tax amount under dispute by 31 March 2025.

Further, this waiver excludes cases of erroneously sanctioned refunds and applies only to open cases, which are still in appeal or under dispute, and do not appear to extend to cases where the taxpayer has already paid interest and penalty.

Thus the  budget provides to allow waiver of interest and penalty for specified non-fraudulent GST demand notices for the financial years 2017-18 to 2019-20 to all types of assesse whether it is  be it an individual, a company, or otherwise.

Which GST notices are eligible for waiver penalty and interest?

The benefit of this conditional waiver scheme applies to only those assesse who have received a section 73 GST notices, i.e., non-fraud notice.

Which are the GST notice-fraud and non-fraud cases? 

1.GST notice-fraud

If the assessee primarily intends to evade tax/suppressed information/provides statements which are not factually correct, then the GST Authorities issue notices deciding to be qualified as ‘fraud cases.

2. GST Notice non fraud

Where the notice is issues due to technical error, where the assesee does not have any intention and due to technical error or due to legal interpretation and In cases of inadvertent errors whereby intention is not to evade taxes/the issue pertains to be of legal interpretational issue or in cases where there is no loss to the exchequer, such matters are decided as ‘non-fraud’ notices.

What are the conditions for getting waiver of GST penalty and interest in GST demand notices?

1. GST demand notices issued under section 73 issued for FYs 2017-18 to 2019-20 and where the GST demand amount has been paid are eligible for this conditional waiver.
2. The waiver of interest and penalty is conditional and is subject to payment of tax amount under dispute by 31 March 2025.
3. Applies only to open cases, which are still in appeal or under dispute. i.e a.Notice issued but order has not been passed, or b. Order passed by GST Proper Officer, but Appellate Authority or Revisional Authority has not passed the order, or c. Order passed by Appellate Authority or Revision Authority, but Tribunal has not passed the order
4. Waiver will not be available in case of erroneous refunds
5. Further, this waiver excludes cases of erroneously sanctioned refunds, and do not appear to extend to cases where the taxpayer has already paid interest and penalty.

Rational behind to introduce section 128A under GST Act

1. Provide certainty and transparency, allowing taxpayers to effectively plan their finances.
2. Focusing relief on genuine cases and excluding those involving fraud, willful misrepresentation, or suppression of facts,
3. the amendment recognises genuine issues arising from GST implementation and is extending support to compliant taxpayers.
4. To  encourages voluntary compliance by allowing the waiver of penalty and interest that some of his clients who were issued a GST show cause notice (SCN) under section 73

the GST Council had recommended to the government about this in last month’s meeting.

Benefits of   conditional waiver of scheme:-

1. Benefit of waiver of interest and penalties for tax disputes faced by taxpayers

2. The Small businesses and individual taxpayers would be able to reduce the financial burden who cannot afford the litigation.

3. In the  initial years of implementation GST of (FY 2017-18 to FY 2019-20), there were various legal issue, and it was a much-needed resolution to lingering disputes without imposing additional financial burden.

4. It will encourage voluntary compliance by taxpayers to come forward and settle their outstanding tax dues for past periods.

Discover the big GST relief in Budget 2024 – no interest or penalties for certain GST notices. Get expert guidance from a CA in Udaipur or a top GST consultant to ensure you maximize this opportunity.