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New GST Section 128A: Key Provisions and Their Impact

A Guide to the New Section 128A Under the GST Act

The Central Goods and Services Tax (CGST) Act has introduced a new section 128A, to decrease the tax loads and proposes relief for the assessees towards tax obligations made between July 1, 2017, and March 31, 2020.

This amendment permits people with tax obligations to settle their debts without facing extra interest or penalties, as long as they meet certain conditions.

Latest Update

  • The GST department has given an advisory on a new waiver scheme under GST section 128a. Read More
  • CBIC has clarified various questions related to GST section 128A. Read Circular

Major Key Provisions Under GST Section 128A

The GST Section 128A contains some important provisions, which you can see below:

Application Scope

The relief comprises the amounts resulting from the notices furnished u/s 73, which is related to the non-payment or short tax payment, and orders passed u/s 107 and 108, which deal with the amendment of tax assessments and pleas respectively.

Read Also: Easy to Understand 21 Offences, Penalties and Appeals Under GST

Relief Provisions

The taxpayers to get the advantage should ensure that they pay the total amount left as mentioned in the pertinent notice or order. The modification specifies that if an appeal is in process for the tax amount, then the relief would not apply until the plea gets withdrawn via the taxpayer.

Forthcoming Proceedings

Under these updated provisions once the amount is settled all the pertinent proceedings would be regarded gets finished. Taxpayers should keep in mind that certain orders cannot be appealed after this settlement has been finalized.

Insertion of New Section 128A

Payment of Tax Without Penalty

The assessees may settle their obligations shown in a notice or order issued under distinct subsections of the CGST act without filing the interest or penalties. This is relevant if they complete the total payment by a date set by the government based on suggestions from the Goods and Services Tax (GST) Council.

Restrictions

The same provision does not apply to the matters that engage the false refunds. Additionally, any interest or penalty that has been paid will not be eligible for a refund, meaning taxpayers cannot gain from relief concerning previous payments.

Main Effect on Taxpayers

The same amendment does navigate towards furnishing relief to the businesses and the persons who faced hurdles to attain their tax liabilities in the tough economic conditions of the previous few years. Being able to pay off overdue taxes without penalties is expected to promote adherence to tax obligations and lessen the financial pressure on taxpayers.

The assessees are recommended to analyze their tax obligations for the particular duration and take benefit of the same opportunity to fill the left dues at the time of reducing the financial repercussions. To ensure compliance with the updated provisions it is crucial to stay updated towards the notification of the government regarding the due dates for the payments.

Closure: Section 128A in the CGST Act introduction marks a significant step for furnishing relief to the assessees loaded with older tax obligations. This amendment through removing the penalties and interest has the objective to streamline smoother compliance and assist the economic recovery in the surge of earlier challenges. To precisely navigate these updated provisions the taxpayers are motivated to consult with their tax advisors.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
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