The CBIC issued Instruction No.02/2025-GST on 07.02.2025, concerning the Procedure to be followed in the department appeal filed against interest and/or penalty only, pertinent to Section 128A of the CGST Act, 2017.
Distinct doubts concerning the applicability of Section 128A have been described in Circular No. 238/32/2024-GST, on 15th October 2024. Queries have been raised about the advantages of Section 128A can be extended in matters where the tax amount is been filed, though the department has furnished the pleas as:
- Arithmetic errors in interest calculation.
- Issues with penalty imposition, like no penalty or penalties below specified thresholds.
Observations of GST Circular No.238/32/2024
As per S. No. 4 of the Table in Para 4 of Circular No. 238/32/2024-GST Cases where the tax due has been filed before and the dispute related merely to the interest and/or penalty u/s 73 are qualified for the advantages of section 128A. It has been quoted that the taxpayer fulfilling the eligibility norms of section 128A must not be refused as of the only technicalities like the department filing or objecting to file a plea.
Clarifications vide this Instruction: Taxpayers who have filed the tax amount demanded u/s 73 of the CGST Act through face disputes for the interest or penalties are qualified for section 128A advantages. These advantages must not be refused even when the department has submitted the plea or process of filing a plea related to the wrong interest computations or wrong levying or non-imposition of penalties.
Subsequently, the proper officers are directed to withdraw the pleas submitted via the department in matters where the taxpayers fulfil the norms of section 128A. In cases where the orders u/s 73 are under review, the proper officers may accept these orders if they fulfil the criteria of section 128A.
