Section 128A GST Amnesty — §73 Show-Cause Waiver Framework

Section 128A of the Central Goods and Services Tax Act, 2017 — inserted by the Finance (No. 2) Act, 2024 and notified effective 1 November 2024 — waives interest and penalty on Section 73 demands for FY 2017-18, 2018-19 and 2019-20 if the taxpayer pays the full tax through FORM GST DRC-03 and files FORM GST SPL-01 (against a notice) or SPL-02 (against an order). CBIC Circulars 248, 249 and 250 of 2025 clarify eligibility, communication formalities, and appellate jurisdiction.

TL;DR for founders

If your business received a GST show-cause notice or adjudication order under Section 73 (the non-fraud provision) for FY 2017-18, 2018-19, or 2019-20, you can close the matter by paying only the disputed tax — interest and penalty are waived. Pay the tax using FORM GST DRC-03, then file FORM GST SPL-01 (against a notice still pending) or SPL-02 (against an order already passed). If you have an appeal pending at the Commissioner (Appeals) or the Tribunal for those years, intimate the appellate authority that you are not pursuing the appeal for the covered years. The scheme does not apply to Section 74 (fraud) demands. Payments already made through GSTR-3B before 1 November 2024 count if they were intended towards the Section 73 demand — subject to proper-officer verification.

Background — why a §128A amnesty existed

The first three GST years — FY 2017-18, 2018-19, and 2019-20 — produced a long tail of assessment disputes that never fully closed. Transitional ITC, mismatch between GSTR-3B and GSTR-1, clerical 2A-vs-3B reconciliation gaps, and contested classification calls all fed a growing docket of Section 73 show-cause notices. Section 73 covers the ordinary (non-fraud) recovery pathway: where the department alleges tax short-paid, unpaid, erroneously refunded, or ITC wrongly availed, without invoking the fraud ingredients of Section 74.

Section 73 demands carry three components: tax, interest under Section 50, and penalty (10% of tax or ₹10,000, whichever is higher, if the taxpayer pays after the notice but before the order). For legacy FY 2017-18 to 2019-20 demands, the compounded interest alone — running from the first day of the month after the tax period — frequently exceeded the underlying tax itself. The disputes were also clogging the dispute-resolution hierarchy at the Commissioner (Appeals) stage.

The Finance (No. 2) Act, 2024 (No. 15 of 2024) inserted Section 128A into the CGST Act, 2017 to clear this backlog. The section was brought into force with effect from 1 November 2024. It is a one-time window: pay the tax in full for covered years, and interest plus penalty fall away. The GST (Compensation to States) Act, 2017 and the IGST Act, 2017 carry parallel references, so the waiver flows across CGST, SGST, UTGST and IGST liabilities raised under the corresponding Section 73 provision.

Three CBIC circulars and two Central Tax notifications issued in January–June 2025 built the operational scaffolding around Section 128A: the amendment to CGST Rules via Notification 07/2025-Central Tax (23 January 2025); the parallel GSTR-9C late-fee waiver via Notification 08/2025-Central Tax (23 January 2025); the core eligibility-and-procedure clarification via CBIC Circular 248/05/2025-GST (27 March 2025); the DIN/RFN rationalisation via Circular 249/06/2025-GST (9 June 2025); and the appellate-jurisdiction fix for DGGI-originated CAA orders via Circular 250/2025-GST (24 June 2025).

Key provisions — §128A and its procedural scaffolding

The framework sits across five instruments. The operative effect of each:

What Section 128A itself requires

Three ingredients must line up for the waiver to bite:

1. The demand is under Section 73. Section 74 (fraud, wilful misstatement, suppression) demands are expressly excluded.
2. The period is FY 2017-18, FY 2018-19, or FY 2019-20. Any later FY falls outside the window, even if the notice or order was issued recently.
3. The taxpayer pays the full tax amount through the prescribed mode within the prescribed window — generally through FORM GST DRC-03 debiting the electronic liability register against the order-specific entry (per Rule 164 CGST Rules).

On full payment plus a SPL-01 (for a pending notice) or SPL-02 (for an order or appellate order) application, interest and penalty are waived. Where an appeal is pending, the taxpayer must communicate the non-prosecution intent to the appellate authority. The rule against revival is strict: once the waiver is availed, the dispute cannot be reopened.

(Verbatim clause-by-clause text on Veritect Legal AI via corpus composite keys CGST_07_2025, CGST_08_2025, CIR_248_2025, CIR_249_2025, CIR_250_2025.)

Circular 248/2025 — the four operational fixes

Circular 248 resolves the two highest-volume questions taxpayers raised in the first four months after Section 128A went live:

Fix 1: GSTR-3B payments pre-1 November 2024 count. Rule 164 mandates DRC-03 for payments made to avail the waiver. Circular 248 (paragraph 4.1) confirms that a taxpayer who had already paid tax through FORM GSTR-3B before 1 November 2024 — with the payment intended toward the Section 73 demand — is also eligible for the Section 128A benefit, subject to verification by the proper officer. This clarification follows the earlier Circular 238/32/2024-GST (15 October 2024) and is now incorporated directly into the live SPL-01/SPL-02 adjudication path.

Fix 2: Payments on or after 1 November 2024 must be DRC-03. The second limb of paragraph 4.1 is a hard cut-off: any taxpayer who intends to avail the benefit after Section 128A came into force must make payments through the modes prescribed under Rule 164 of the CGST Rules — meaning FORM GST DRC-03 for notice-stage payments, or a direct debit to the electronic liability register for order-stage payments under Rule 164(2). GSTR-3B is no longer a valid payment vehicle for post-1 November 2024 Section 128A availment.

Fix 3: Mixed-period notices get split appellate treatment. Paragraph 4.2 addresses a common fact pattern: a consolidated SCN or O-I-O covers FY 2017-18 to 2021-22. Rule 164(4) and the proviso to Rule 164(7) were amended so the taxpayer can file SPL-01 or SPL-02 after paying tax for the covered years, and then intimate the appellate authority or Tribunal that the appeal is not pursued for FY 2017-18 to 2019-20. The appellate authority then disposes of the appeal for the non-covered period separately, "as it thinks just and proper."

Fix 4: Withdrawal of earlier Circular clarification. Paragraph 4.2.2 expressly withdraws paragraph 4 point 6 of Circular 238/32/2024-GST dated 15 October 2024. Practitioners relying on that earlier clarification should switch to Circular 248/2025 as the live position.

Circulars 249 and 250 — reducing frictions around CBIC communications

Circular 249/06/2025-GST, dated 9 June 2025, looks at a small but irritating procedural overhead — the duplicate DIN/RFN situation. Since Circular 122/41/2019-GST (5 November 2019), CBIC officers have been required to quote a Document Identification Number (DIN) on every taxpayer communication, verifiable at the DIN-utility portal. But documents served via the GST common portal under Section 169(1)(d) of the CGST Act automatically carry a Reference Number (RFN), verifiable at services.gst.gov.in/services/verifyRfn. Running both resulted in two different verifiable numbers on the same document. Circular 249 clarifies that for common-portal communications with verifiable RFN, quoting DIN separately is no longer required. Circular 122/41/2019 and 128/47/2019 stand modified to this extent. Practically, a Section 128A-related SCN or O-I-O served via the common portal with an RFN is a valid communication; taxpayers and their advisors should not raise objections on the basis of missing DIN.

Circular 250/2025-GST, dated 24 June 2025, fixes a jurisdictional gap around orders passed by Common Adjudicating Authorities (CAAs) for show-cause notices issued by the Directorate General of GST Intelligence (DGGI). Section 107 (appeals) and Section 108 (revision) of the CGST Act were not earlier mapped cleanly to CAA orders. The circular clarifies:

• Review under §107: the Principal Commissioner or Commissioner of Central Tax under whom the CAA (Additional/Joint Commissioner) is posted is the reviewing authority.
• Revision under §108: the same Principal Commissioner / Commissioner is the revisional authority.
• Appeals: lie before the Commissioner (Appeals) corresponding to the territorial jurisdiction of the said Principal Commissioner / Commissioner, as specified in Table III of Notification 02/2017-Central Tax dated 19 June 2017.
• Departmental representation: the same Principal Commissioner / Commissioner represents the department in appeal proceedings and may appoint a subordinate as designated officer.
• DGGI consultation: the reviewing or revisional authority may seek comments from the concerned DGGI formation before deciding.

For taxpayers handling DGGI-initiated Section 73 proceedings under Section 128A, Circular 250 matters because it identifies exactly which appellate forum will hear the non-covered-period appeal after SPL-01/SPL-02 is filed.

Who is affected

The Section 128A framework has six identifiable actor groups:

• Registered taxpayers with Section 73 notices for FY 2017-18, 2018-19, or 2019-20 — the primary beneficiary class. If a SCN is pending at the adjudicating-authority stage, file SPL-01 after tax payment. If an O-I-O has already issued and is pending in appeal, file SPL-02 and withdraw the appeal for covered years.
• Taxpayers who paid disputed tax through GSTR-3B before 1 November 2024 — now eligible per Circular 248/2025 paragraph 4.1, subject to proper-officer verification that the payment was intended towards the Section 73 demand. Keep evidence: ledger postings, reconciliation notes, correspondence with the jurisdictional officer.
• Taxpayers with consolidated notices straddling covered and non-covered periods — file SPL-01/SPL-02 for covered years, intimate the appellate authority of non-prosecution, and let the non-covered portion proceed as a standalone appeal.
• Taxpayers with Section 74 (fraud) demands — excluded from Section 128A. Any waiver path runs through separate mechanisms (voluntary payment under Section 74(5), compounding, or settlement proceedings under pre-GST regimes if applicable).
• Registered persons required to file GSTR-9C for FY 2017-18 to 2022-23 but who did not — a parallel compliance cleanup. Notification 08/2025-Central Tax waived excess §47 late fee on GSTR-9 where GSTR-9C was filed on or before 31 March 2025. No refund of already-paid late fees; no extension beyond 31 March 2025 captured in the notification text.
• Taxpayers with DGGI-originated show-cause notices adjudicated by CAAs — Circular 250/2025 now identifies the specific reviewing, revisional, and appellate fora. If your covered-period SPL-02 is against a CAA order, track the Principal Commissioner / Commissioner under whom the CAA sits.

The framework is silent on voluntary disclosures made without an SCN — Section 128A triggers on "demands" under Section 73, which typically requires at least an issued SCN. Pre-SCN voluntary payments historically sit under Section 73(5) or 73(6) and do not need the Section 128A pathway.

Practical implications

The 31 March 2025 GSTR-9C cut-off was strict. Notification 08/2025's late-fee waiver required GSTR-9C filing on or before 31 March 2025. Taxpayers who missed that date do not get a second window under the same notification — any future waiver requires a fresh notification. As of 24 April 2026, no successor waiver extending that date is captured in the corpus.

Payment sequencing matters. For post-1 November 2024 availment, Rule 164 prescribes DRC-03 for notice-stage payments and a direct electronic-liability-register debit for order-stage payments. Missing the correct form risks the proper officer treating the payment as general tax rather than 128A-specific — which can delay waiver confirmation. Confirm with the jurisdictional officer before posting.

Appeal withdrawal is partial, not full. The taxpayer does not abandon the entire appeal — only the portion relating to FY 2017-18 to 2019-20. For mixed-period orders, the appellate authority continues to hear the non-covered period under normal Section 107 procedure.

ITC blocking carry-over. Section 128A does not restore wrongly availed ITC. Where the original Section 73 demand quantum was driven by an ITC reversal under Section 17 or Rule 42/43, paying the tax closes the demand but does not re-credit the blocked ITC. Plan the cash outflow accordingly.

DIN objections no longer hold. Post-Circular 249, a common-portal SCN or O-I-O with a valid RFN is a valid service under Section 169(1)(d). Arguments that the document is void for lack of DIN — which occasionally surfaced in the first two years of the DIN regime — now fail.

CAA-DGGI appellate track is fixed. The Circular 250 clarification matters for SPL-02 filings against CAA orders: the appeal sits before the Commissioner (Appeals) corresponding to the Principal Commissioner / Commissioner under whom the CAA is posted (Table III of Notification 02/2017-Central Tax).

Effective dates and transitional provisions

Section 128A itself does not carry a statutory sunset in the CGST Act text, but the scheme is structurally finite — once all FY 2017-18 to 2019-20 demands wash through, the section's live-dispute footprint goes to zero.

Founder checklist

• Identify in-scope demands. Pull every Section 73 show-cause notice and every Order-in-Original covering FY 2017-18 to 2019-20 that is still live at any stage (adjudication, appeal, revision, Tribunal). Section 74 demands are excluded — do not mix them in.
• Calculate the tax-only payoff. Quantify tax (exclude interest under §50 and penalty). Compare against expected legal spend + interest-compounding-forward if the dispute is fought to conclusion. In most FY 2017-18 to 2019-20 cases, 128A is the economically rational choice.
• Choose the right SPL form. SPL-01 for pending notices; SPL-02 for orders. Pay tax via DRC-03 (post-1 Nov 2024) or confirm GSTR-3B-pre-1-Nov-2024 payment eligibility with the jurisdictional officer (Circular 248 paragraph 4.1).
• For mixed-period orders, split the appeal. File SPL-01/SPL-02 for covered years, intimate the Appellate Authority / Tribunal that the appeal is not pursued for FY 2017-18 to 2019-20, and let the post-2019-20 portion proceed separately.
• Track the CAA track if the O-I-O is DGGI-originated — Circular 250 identifies exactly which Commissioner (Appeals) hears the non-covered-period appeal.
• Watch for successor waivers on GSTR-9C late fees beyond 31 March 2025 — none captured as of 24 April 2026.

FAQ

Q: What does Section 128A of the CGST Act actually waive?

Section 128A waives interest under Section 50 and penalty under Sections 73, 74 or other applicable provisions on demands raised under Section 73 of the CGST Act for FY 2017-18, 2018-19 and 2019-20, provided the taxpayer pays the full tax amount demanded within the prescribed window. The tax itself is not waived — only the interest and penalty components. Section 128A was inserted by the Finance (No. 2) Act, 2024 and brought into force with effect from 1 November 2024.

Q: Which FY periods are eligible?

Only FY 2017-18, FY 2018-19 and FY 2019-20 demands under Section 73 (non-fraud proceedings) qualify. Section 74 demands — which involve fraud, wilful misstatement, or suppression — are excluded. Where a notice or order covers a mixed period straddling the 128A window and later years, Circular 248/2025-GST (paragraph 4.2) clarifies that the taxpayer may file SPL-01 / SPL-02 after paying tax for the covered years, and the appellate authority or Tribunal then disposes of the appeal for the non-covered period separately.

Q: What is the right payment mode — GSTR-3B or DRC-03?

Rule 164 of the CGST Rules, 2017 prescribes FORM GST DRC-03 for payments made on or after 1 November 2024 to avail Section 128A. However, Circular 248/2025-GST (paragraph 4.1) clarifies that where a taxpayer had already paid tax through FORM GSTR-3B before 1 November 2024 and the payment was intended to be made towards the Section 73 demand, that payment is also eligible, subject to verification by the proper officer. Post-1 November 2024, only DRC-03 is acceptable.

Q: Do I have to withdraw my pending appeal to avail Section 128A?

Yes — but only for the periods covered under Section 128A. After filing FORM SPL-01 (against a notice) or FORM SPL-02 (against an order), the taxpayer must intimate the Appellate Authority or Appellate Tribunal that the appeal is not being pursued for FY 2017-18, 2018-19 or 2019-20. For periods outside the 128A window that are part of the same consolidated order, the appellate body will pass a separate order as it thinks just and proper (Circular 248/2025-GST, paragraph 4.2.1).

Q: What role do Circulars 249 and 250 of 2025 play?

Circular 249/2025-GST, dated 9 June 2025, rationalises Document Identification Number (DIN) quoting on CBIC communications issued via the common portal — where a Reference Number (RFN) is already generated and verifiable at gst.gov.in, separate DIN quoting is no longer required. Circular 250/2025-GST, dated 24 June 2025, fixes review, revision and appeal jurisdiction for orders passed by Common Adjudicating Authorities (CAAs) in DGGI-originated show-cause notices — the Principal Commissioner or Commissioner under whom the CAA is posted acts as reviewing and revisional authority, with appeals lying to the corresponding Commissioner (Appeals) per Table III of Notification 02/2017-Central Tax.

Q: What does Notification 08/2025-Central Tax change on late fees?

Notification 08/2025-Central Tax, dated 23 January 2025, waives the late fee under Section 47 of the CGST Act in excess of what is payable up to the date of furnishing FORM GSTR-9, for registered persons who were required to furnish FORM GSTR-9C along with the annual return for FY 2017-18 through FY 2022-23 but failed to do so — provided GSTR-9C is filed on or before 31 March 2025. No refund of late fees already paid is available. This is a parallel amnesty-style instrument to the Section 128A framework, targeting the reconciliation-statement compliance gap across six years.

Sources

• Primary: CBIC CGST Circulars listing — gstcouncil.gov.in/cgst-circulars. Individual PDFs for Circular 248/2025, Circular 249/2025, Circular 250/2025. CBIC CGST (non-rate) notifications listing — gstcouncil.gov.in/cgst-tax-notification. Individual PDFs for Notification 07/2025 and Notification 08/2025.
• Statutory basis: CGST Act, 2017 (12 of 2017) on India Code — Sections 73, 74, 107, 108, 128, 128A, 168, 169. CGST Rules, 2017 — Rules 16A, 142, 164 (verbatim on Veritect Legal AI).

Authored by Veritect Legal Intelligence. Content verified against primary CBIC PDFs on 24 April 2026.

Go deeper with Veritect Legal AI

Veritect's private legal-research product carries the verbatim, clause-by-clause text of every notification and circular referenced above, cross-linked to parent CGST Act sections with supersession chains tracked on an 8–12 week cadence. Teams using Veritect Legal AI get:

• Full-text retrieval across every in-force CBIC notification, circular, and instruction — including the amended Rule 164, FORM SPL-01 and SPL-02 text, and the clause-by-clause Section 128A framework.
• Compliance playbooks that decompose a regime — Section 128A amnesty availment, GSTR-9C late-fee cleanup, CAA-DGGI appellate routing — into step-by-step actions with evidence requirements.
• Same-day alerts on CBIC and GST Council changes affecting the CGST / IGST / UTGST / Compensation Cess sections you track.
• Point-in-time queries: "What did Rule 164 say on 1 April 2025?" — answered with the exact text in force on that date.

Request access →