Section 128A of CGST explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 128A of the CGST Act, 2017 provides a conditional waiver of interest and penalty on tax demands raised under Section 73 (non-fraud cases) for the financial years 2017-18, 2018-19 and 2019-20. If the taxpayer pays the full amount of tax demanded by the notified date, the interest and penalty are fully waived and proceedings are treated as concluded. This "GST Amnesty Scheme" is operationalised through Rule 164 and Forms SPL-01 / SPL-02.
What Section 128A Says — In Plain English
Section 128A was inserted by the Finance (No. 2) Act, 2024 and made effective from 1 November 2024. It provides that notwithstanding anything to the contrary, where any tax is payable under a notice, statement or order issued under Section 73 for the period 1 July 2017 to 31 March 2020, and the person pays the full amount of tax on or before the date notified by the Government, no interest under Section 50 and no penalty shall be payable, and all proceedings in respect of the said notice or order shall be deemed to be concluded.
In plain terms: for old non-fraud demands from the first three GST years, pay the tax and the interest and penalty are wiped out. The waiver covers three routes — (a) a notice or statement under Section 73(1)/(3) where no order has yet been passed, (b) an order under Section 73(9) where no appellate order has been passed, and (c) an order of the Appellate Authority or Revisional Authority. Cases involving fraud, wilful misstatement or suppression under Section 74 are excluded.
Clause / Sub-section Breakdown
| Route | Situation | Application form |
|---|---|---|
| (a) | Section 73 notice/statement pending, no order yet | Form SPL-01 |
| (b) | Section 73(9) order passed, no appellate order | Form SPL-02 |
| (c) | Appellate/Revisional order in a Section 73 matter | Form SPL-02 |
| Condition | Full tax paid by the notified date | Interest + penalty waived |
| Exclusions | Section 74 fraud cases; erroneous refunds | Not eligible |
Applicability & Scope
The scheme applies only to non-fraud demands under Section 73 for FY 2017-18, 2018-19 and 2019-20. The Government notified the payment cut-off as 31 March 2025 (with the application to be filed within three months thereafter, i.e., by 30 June 2025). Applications are filed in Form SPL-01 (where only a notice/statement is pending) or Form SPL-02 (where an order has been issued), and the department responds through SPL-05 (acceptance), SPL-06 or SPL-07 (rejection). Where a demand includes both eligible and ineligible periods, or partly relates to erroneous refund, only the eligible portion qualifies.
Worked Examples
Example 1. Assume a taxpayer receives a Section 73 order for FY 2018-19 with the following demand:
| Component | Amount (₹) | Under Section 128A |
|---|---|---|
| Tax | 5,00,000 | Payable in full |
| Interest (Section 50) | 1,80,000 | Waived |
| Penalty | 50,000 | Waived |
| Total demand | 7,30,000 | — |
If the taxpayer pays the tax of ₹5,00,000 by 31 March 2025 and files Form SPL-02, the interest of ₹1,80,000 and penalty of ₹50,000 are waived — a saving of ₹2,30,000 — and the proceedings under that order are treated as concluded. No refund is available for interest or penalty already paid before availing the scheme.
Example 2. A trader has a Section 73 notice (no order yet) for FY 2017-18 demanding tax ₹80,000 plus interest ₹35,000. The trader pays the ₹80,000 tax before the cut-off and files Form SPL-01. The ₹35,000 interest is waived and the notice proceedings conclude. Had ₹20,000 of the demand instead related to an erroneous refund, only the ₹60,000 non-refund tax would qualify for waiver of its interest, and the refund-linked portion would fall outside the scheme.
Step-by-Step in Practice
1. Confirm the demand is under Section 73 (non-fraud) and relates to FY 2017-18, 2018-19 or 2019-20. 2. Compute the full tax component, ignoring interest and penalty. 3. Pay the entire tax through the electronic liability/cash ledger by the notified date (31 March 2025). 4. File Form SPL-01 (notice pending) or SPL-02 (order issued) within three months of the payment cut-off. 5. Track the department's response in SPL-05 (accepted) or SPL-06/07 (rejected). 6. On acceptance, the interest and penalty are waived and proceedings are treated as concluded.
Common Mistakes & Practical Notes
- Attempting to use the scheme for Section 74 fraud cases — they are expressly excluded.
- Paying only part of the tax — the waiver requires the full tax to be paid.
- Missing the SPL-01/SPL-02 application window (within three months of the payment cut-off).
- Expecting a refund of interest or penalty already paid — none is available.
- Overlooking that erroneous-refund demands and ineligible periods do not qualify, even within a single order.
- Filing the wrong form — SPL-01 is for pending notices, SPL-02 for issued orders.
Penalties, Timelines & Related Sections
Section 128A is a relief provision rather than a penal one — it removes interest under Section 50 and penalty on qualifying Section 73 demands. The binding timeline is the notified payment cut-off (31 March 2025) followed by the SPL application within three months. The mechanics live in Rule 164 of the CGST Rules with Forms SPL-01 to SPL-08. Related provisions: Section 73 (determination of tax not paid, other than fraud), Section 74 (fraud cases — excluded), Section 50 (interest on delayed payment), and Sections 107/108 (appeals and revision).
Recent Amendments & Context
Section 128A was inserted by the Finance (No. 2) Act, 2024 and brought into force from 1 November 2024, with Rule 164 and the SPL forms notified to operationalise it. It was recommended by the GST Council to clear the large backlog of early-year (FY 2017-18 to 2019-20) non-fraud disputes, where interest and penalty had often swelled far beyond the tax. By offering a clean "pay the tax, keep the interest and penalty" bargain, the scheme aims to reduce litigation and free up both taxpayer and departmental bandwidth.
Key Facts About Section 128A of CGST
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What relief does Section 128A give?
It waives interest and penalty on Section 73 non-fraud demands for FY 2017-18, 2018-19 and 2019-20, provided the taxpayer pays the full tax by the notified date and files the prescribed application.
Which years are covered by the Section 128A amnesty?
Only the financial years 2017-18, 2018-19 and 2019-20 (period 1 July 2017 to 31 March 2020) are covered.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Section 128A of CGST: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.