Effective 27 March 2025, vide Notification No. 11/2025-Central Tax dated 27 March 2025, rules 164(4) and 164(7) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) dealing with the procedure and conditions for closure of proceedings and opting for the Amnesty Scheme under Section 128A of the Central Goods and Services Tax Act, 2017 (CGST Act) have been amended as under:

• In cases where the notice/ statement/ order partially pertains to the period covered under the Amnesty Scheme (i.e., from 1 July 2017 till 31 March 2020) and partially pertains to the subsequent period, earlier the taxpayer was permitted to file an application under the Amnesty Scheme only after the payment of full amount of tax demanded in the said notice/ statement/  order for the entire period. In addition to the above, the taxpayer was also liable to discharge applicable interest and/ or penalty in respect of demands pertaining to the subsequent period. 

• The aforesaid provision is now amended to enable a taxpayer to opt for the Amnesty Scheme only for the period covered under the Amnesty Scheme with an option to contest the dispute for the subsequent period(s) with the Appellate Authority/ Goods and Services Tax Appellate Tribunal (GSTAT). Accordingly, instead of withdrawing the appeal in entirety, the taxpayer would only be required to intimate the Appellate Authority/ GSTAT that he does not wish to pursue the appeal for the period covered by the Amnesty Scheme basis, which the Appellate Authority/ GSTAT shall pass an order for the subsequent period(s). It is also clarified that the appeal shall be deemed to be withdrawn to the extent of the said intimation for the period covered under the Amnesty Scheme.

•  No refund shall be available in respect of tax, interest and/ or penalty which has already been discharged for the entire period (i.e., for the period covered under the Amnesty Scheme and the subsequent period(s)) prior to the introduction of the aforesaid amendment. Accordingly, a refund of any such amounts paid till 26 March 2025 shall not be available.

Additionally, CBIC has also issued the following clarifications pertaining to the applicability of the Amnesty Scheme:

• A taxpayer who has paid applicable GST through Form GSTR-3B prior to the introduction of Section 128A of the CGST Act (i.e., prior to 1 November 2024) shall be eligible to claim the benefit of the Amnesty Scheme, subject to verification by the proper officer. However, from 1 November 2024 and onward, a taxpayer intending to avail the benefit of the Amnesty Scheme shall be mandatorily required to discharge GST through the modes prescribed under Rule 164 of the CGST Rules.

• Pursuant to the aforesaid amendments to Rules 164(4) and 164(7) of the CGST Rules, where the notice/ statement/ order partially pertains to the period covered under the Amnesty Scheme and partially pertains to the subsequent period, the taxpayer shall be permitted to file an application for Amnesty Scheme after payment of tax liabilities for the period covered under the Amnesty Scheme. Accordingly, the earlier clarification provided vide Para 4 of Circular No. 238/32/2024-GST dated 15 October 2024 has been withdrawn.

BDO India Comments

The amendments to Rules 164(4) and 164(7) of the CGST Rules are in response to the industry representations. However, the amendments are made quite close to the last day of making payment under the scheme, and with the restriction on claiming refund for payments already made for the periods not covered under the scheme, the persons who had opted for the Amnesty Scheme earlier are under a comparative disadvantage and such restriction should be reassessed. A further clarification may also be issued that taxpayers in such cases have at least the option to continue the dispute as per the newly introduced proviso to rule 164(7). The clarification on accepting the payments made through form GSTR 3B for availing the Amnesty Scheme is welcome. 

[Source – Notification No. 11/2025-Central Tax and Circular No. 248/05/2025-GST dated 27 March 2025]