GST Circular No. 248/05/2025-GST dated 27th March 2025

✅ What is Section 128A about?

Section 128A was inserted to waive off interest and/or penalty for certain tax demands under Section 73 (non-fraud cases) for the period from 1st July 2017 to 31st March 2020, if certain conditions are met.

🔍 Who can get this benefit?

Any taxpayer who:

• Has tax demand raised under Section 73 (non-fraud),

• For the period 01-07-2017 to 31-03-2020, and

• Pays the tax voluntarily as per prescribed procedure.

📌 Clarification 1: What if tax was already paid through GSTR-3B (not DRC-03) before 01-Nov-2024?

🔹 Issue:

Some taxpayers already paid the tax through their GSTR-3B return before Section 128A was notified on 1st Nov 2024. Are they still eligible for interest/penalty waiver?

✅ Clarification:

Yes, such taxpayers are eligible for waiver if:

• The payment was before 1st Nov 2024, and

• It was made against the same demand (i.e., not for a different liability),

• Subject to officer verification.

📘 Example:

ABC Pvt Ltd received a notice for short payment of GST for FY 2018-19. They paid the shortfall in GSTR-3B in Aug 2023.
Now, under Section 128A, they can apply for waiver of interest and penalty, even though they didn’t use DRC-03.

📌 Clarification 2: What if a single notice covers both eligible and non-eligible periods (before & after Mar 2020)?

🔹 Issue:

Some demand notices or appeal orders cover multiple periods, like:

• Part of it is for FY 2017–18 to 2019–20 (covered under Section 128A),

• And part is after 31st March 2020 (not covered).

✅ Clarification:

Taxpayers do NOT need to withdraw the entire appeal. They can:

• File FORM SPL-01 or SPL-02 (introduced for this purpose),

• Clearly mention that they are availing benefit only for FY 2017-18 to 2019-20,

• Continue with the appeal for remaining period (post-March 2020).

📘 Example:

XYZ Ltd receives a demand order for:

• ₹50,000 tax for FY 2018–19 (eligible),

• ₹70,000 tax for FY 2020–21 (not eligible).

They can:

• Pay ₹50,000 (plus no interest/penalty),

• File SPL-01,

• Withdraw appeal only for FY 2018–19, and

• Continue fighting the appeal for FY 2020–21.

✅ Summary Table:

Scenario	Eligible for Section 128A?	Action Required
Paid through GSTR-3B before 01-Nov-2024	✅ Yes	Ensure it relates to same demand; officer may verify
Paying on/after 01-Nov-2024	✅ Yes	Use DRC-03 or follow Rule 164 procedure
Mixed period notice (before & after Mar 2020)	✅ Partially	Pay for eligible part, file SPL-01/SPL-02, withdraw appeal only for that part

📣 Final Notes:

• Department officers are advised to ensure uniform implementation.

• Trade Notices should be issued for awareness.

• Any difficulty can be reported to CBIC.