Introduction:
The Indian government’s Budget 2024 introduces a significant amendment in the Finance (No.2) Bill – 2024 with the proposal of Section 128A. This new section aims to provide relief to taxpayers involved in non-fraud cases under Section 73 of the CGST Act. The introduction of this amnesty scheme is a strategic move to ease the burden on taxpayers by offering exemptions from interest and penalties, provided certain conditions are met.
Key Provisions of Section 128A
Eligible Situations for Amnesty
- Notice Issued under Section 73(1): Taxpayers who have received a notice under Section 73(1) but have not yet received an order under Section 73(9).
- Statement Issued under Section 73(3): Taxpayers who have received a statement under Section 73(3) but have not yet received an order under Section 73(9).
- Order Issued under Section 73(9): Taxpayers who have received an order under Section 73(9) but no further order under Section 107(11) (Appeal Order) or Section 108(1) (Revision Order) has been issued.
- Appeal Order Issued under Section 107(11) or Revision Order under Section 108(1): Taxpayers who have received an order under these sections but have not received a Tribunal order under Section 113(1) since Tribunal work is still pending.
In these situations, taxpayers are only required to pay the tax amount. Interest and penalties imposed will be waived if the tax is paid by a date to be notified by the government, as recommended by the GST Council.
Section 128A Provisions
- Proviso 1: Inclusion of Non-Fraud Cases: If a notice was issued under Section 74(1) and an appeal or tribunal concludes that fraud is not established, it will be considered under Section 73(1). This allows the taxpayer to benefit from the amnesty scheme.
- Proviso 2: Additional Demand: If an additional demand is created after the conclusion of proceedings, the taxpayer must pay the additional tax within three months of the order. The conclusion of proceedings is subject to this condition.
- Proviso 3: No Refund of Paid Interest and Penalty: If interest and penalties have already been paid, no refund will be given, as is typical in amnesty schemes.
- Section 128A(2): Exclusion of Erroneous Refunds: The amnesty does not apply to amounts payable due to erroneous refunds.
- Section 128A(3): Withdrawal of Appeals: Taxpayers must withdraw any pending appeals before a date notified by the government to benefit from the amnesty.
- Finality of Orders: Once the amount is paid under Section 128A(1), no further appeals under Section 107(2) or Section 112(1) can be made against the orders.
Drafting Correction Required
There is a noted drafting error in Section 128A(1)(c), which inadvertently includes all orders passed under Section 107(11) and Section 108(1) in the amnesty scheme, regardless of their relation to Section 73. The corrected version should specify that only orders related to Section 73 demands are eligible.
Conclusion
Section 128A is a welcome relief for taxpayers involved in non-fraud cases, offering a chance to resolve disputes without the burden of penalties and interest. Taxpayers should stay informed about government notifications regarding specific dates and conditions to take full advantage of this amnesty scheme. Consulting a Chartered Accountant for personalized advice is highly recommended. #canatasha
FAQs
1. What is the main benefit of Section 128A?
The main benefit is the waiver of interest and penalties for taxpayers involved in non-fraud cases under Section 73, provided they pay the tax amount by a specified date.
2. Who is eligible for the amnesty under Section 128A?
Taxpayers who have received notices, statements, or orders under Section 73, and those who have appealed against such orders but have not yet received final orders from higher authorities, are eligible.
3. What happens if I have already paid interest and penalties?
If you have already paid interest and penalties, you will not receive a refund as per the third proviso of Section 128A.
4. Do I need to withdraw my appeal to benefit from the amnesty?
Yes, you must withdraw any pending appeals before the notified date to benefit from the amnesty.
5. What if additional tax demand is created after the proceedings?
You must pay the additional tax within three months from the date of the order, as stipulated in the second proviso.
6. Does this amnesty scheme apply to fraudulent cases?
No, the amnesty scheme applies only to non-fraud cases under Section 73.
7. Is this considered an amnesty scheme?
Yes, it is practically considered an amnesty scheme as it provides relief from penalties and interest for eligible taxpayers.
8. Can I appeal against orders after paying the tax under Section 128A?
No, once the tax is paid under Section 128A, no further appeals against those orders can be made.
9. Will there be a refund if tax is paid erroneously under this scheme?
No, refunds will not be provided for interest and penalties already paid.
10. How can I stay updated about the specific dates and conditions for this amnesty?
The government will notify the specific dates and conditions, and it is advisable to regularly check official announcements or consult with a tax professional.
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