The Ministry of Finance is expected to issue a circular regarding the much-anticipated goods and services tax ( GST ) Amnesty Scheme, which was recently proposed in the Budget 2024, as per sources.
The scheme aims to provide relief to taxpayers by waiving interest and penalties under certain conditions for tax matters arising between July 1, 2017, and March 31, 2020. It covers show cause notices (SCNs), adjudicating orders, and appeal orders issued for the financial years 2017-18, 2018-19, and 2019-20. According to sources, under the scheme, taxpayers can benefit from a waiver of interest and penalties if they pay the full amount of tax due by March 31, 2025.
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“However, cases concerning refunds are explicitly excluded from the scheme. Taxpayers currently involved in appeals or court proceedings must withdraw these cases to be eligible for amnesty. Furthermore, once a case is resolved under the scheme, it cannot be appealed against,” said a government source.
The applicability of the scheme is expected to commence around October or November 2024, following the issuance of the official notification. Additionally, there is ongoing industry representation advocating for the inclusion of cases with demands solely for interest or penalties, as well as for the consideration of transitional credit disputes under the scheme.
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The scheme operates on a SCN or order-wise basis, necessitating taxpayers to address all issues related to a specific SCN or order if they choose to participate. “We have represented that in case tax amount has been paid earlier and only interest and/or penalty are pending, technically these are not included in the Scheme as per enacted Section 128A of CGST Act; these cases should be included.
Another issue is that there must be a provision for carving out the three FYs 17-18 to 19-20 out of the SCN/Order for which Amnesty can be availed; whereas the balance years can be mitigated by the taxpayer, incase desired and another representation of the tax professionals is that ITC Ledger should be allowed to be used for making payment of tax under the Scheme. Yet another representation is in case for the said FYs there are disputes for time barring period of ITC u/s 16(4) for which relief is available under the new Sections 16(5) and 16(6) of Central Goods and Services Tax Act; In such case these amounts u/s 16(4) should be allowed to be reduced from the disputed amount for which the benefit of the Scheme can be availed.
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