How to pay tax under GST amnesty scheme: GSTN

GSTN has issued an advisory today clarifying how a person can pay the tax demand under the GST amnesty scheme.

If you want to apply for the Goods and Services Tax (GST) amnesty scheme which waives off interest and penalty from specified period GST tax demand notices, then make a note of this new process. This new process has been shared by GSTN today i.e. November 8, 2024. According to the advisory from Goods and Services Tax Network (GSTN), the forms specified for the purpose - GST SPL-01 and GST SPL-02 are still under development and are likely to be available only by the first week of January 2025. Therefore, those persons wanting to pay tax demand under the scheme now can pay it via a different form using the new process.

"In this regard it is informed that Form GST SPL-01 and Form GST SPL-02 are under development and the same will be made available on the common portal tentatively from the first week of January 2025. In the meantime, taxpayers are advised to pay the tax amount demanded in the notice, statement, or order issued under Section 73 on or before March 31st, 2025, to ensure that they receive the waiver benefits by paying their taxes before the deadline," said GSTN in the advisory dated November 8, 2024.

"Taxpayers who don't want to wait for the GST SPL-01 and SPL-02 form to be made available in order to apply for GST Amnesty Scheme can now either use DRC-03 form (DRC-03A for specified cases) or pay the tax demand through the electronic liability register which can be accessed in the post-login mode on the GST portal using the path: Services > Ledgers > Electronic Liability Register > Part-I: Return related liabilities. By using this method, the taxpayer can apply for the GST amnesty scheme now," says chartered accountant Bimal Jain, founder, A2Z Taxcorp LLP.

"This Advisory , has successfully removed the cloud of uncertainty surrounding the availability of Forms SPL-01 and SPL-02 by tentatively confirming their release by January 2025. While the timeline remains indicative, it provides taxpayers with a clear direction, allowing them to shift from speculation to preparation. This assurance enables taxpayers to focus on their priorities without the constant concern of checking the portal, ensuring a smoother and more organized approach to leveraging the Amnesty Scheme," says Adv. (CA) Utkarsh Singhal, Proprietor, Utkarsh Singhal Law Offices Prayagraj.

"It seems like the advisory presents a bit of a paradox—on one hand, it encourages taxpayers to pay the tax by the due date to avail the waiver scheme, but on the other, it acknowledges that the forms needed to formally apply for the benefit are still under development," says Kamal Aggarwal, Senior Advisor, Singhania & Co.

Which form to use to apply for GST amnesty scheme now
According to the advisory by GSTN, taxpayers can pay the tax demand amount through the "payment towards demand" facility in case of demand orders and through Form GST DRC-03 in case of notices. "However, if payment has already been done through Form GST DRC-03 for any demand order then taxpayers need to link the said Form GST DRC 03 with such demand order through Form GST DRC-03A, which is now available on the common portal."

Jain explains which taxpayers need to file DRC-03 Form and which ones need to pay the tax demand through electronic liability register. He says:

DRC-03 (DRC-03A in specified cases) is to be used by: Taxpayers who have been given a show cause notice (SCN), but the adjudicating order has not been passed. If a taxpayer paid Rs 150 for a tax demand of Rs 200, the adjustment of this part payment can be made by filing DRC-03A form.

Electronic liability ledger: Taxpayers against whom the order in original (adjudicating order) has been passed but order in appeal has not been passed, need to pay the tax demand amount through the electronic liability ledger.

"If taxpayers want, then they can wait for the SPL-01 and SPL-02 form to be made available, which GSTN said would be tentatively by the first week of January 2025. If they don't want to wait for applying to the GST amnesty Scheme then they can follow the process mentioned above," says chartered accountant Aniket Kulkarni.

GSTN said in the advisory that the GST council had recommended waiver of interest and penalties in the demand notices or orders issued under Section 73 of the CGST Act, 2017 (i.e. the cases not involving fraud, suppression or willful misstatement, etc.) for the financial years 2017-18, 2018-19 and 2019-20. This was done to reduce tax disputes and to provide relief to taxpayers.

"To avail this waiver, the condition is that the full tax demanded is paid on or before 31.03.2025," said GSTN.

Shashank Shekhar, Partner, DMD Advocates, says, "The Amnesty scheme provisions in certain situations, such as tax demand on account of multiple issues, erroneous refund and demand beyond Financial Years 2017- 20, require the taxpayers to pay the entire tax amount to get waiver of interest and penalty for the Financial Years 2017-20. In such a case, the taxpayers may still be required to pay interest and penalty for the period beyond Financial Years 2017- 20. Accordingly, it is worthwhile for the taxpayers to evaluate and weigh the benefit of waiver of interest and penalty against any additional tax, interest and penalty liability that they may have to suffer on account of opting for the amnesty scheme. Further, while the thrust behind the extension of waiver of interest and penalty for the subject period to the taxpayers was to reduce litigation, in the past the amnesty schemes introduced in the service tax and VAT regime themselves resulted in surge in litigation on account of denial of benefit thereunder to the taxpayers for more reasons than one. Thus, the taxpayers should carefully examine the requirements of the present scheme and act accordingly."


( Originally published on Nov 08, 2024 )