In a major relief to taxpayers, the government has announced significant modifications to the Goods and Services Tax (GST) laws, providing relief to businesses by waiving specific interest and penalties on past tax demands. This new provision, which will take effect on November 1, falls under Section 128A and allows GST authorities to provide waivers, thereby reducing the compliance burden for taxpayers.
The new provision aims at cases where tax demands were issued under Section 73 of the GST Act, which pertains to non-fraudulent tax matters. This decision was reached during the GST Council's 53rd meeting, aiming to resolve disputes stemming from misunderstandings or misinterpretations of the law, rather than deliberate tax evasion.
Who is eligible for the waiver?
The waiver is applicable to taxpayers assessed under Section 73 for the financial years 2017-18, 2018-19, and 2019-20. Eligibility is limited to those whose tax matters do not involve allegations of fraud, misrepresentation, or concealment of information. Taxpayers engaged in disputes for non-fraudulent reasons can take advantage of the scheme if they consent to settle the tax demand and halt any ongoing litigation.
How does the waiver work?
To benefit from the waiver, businesses must accept the tax demand and settle the amount due by March 31, 2025. Once the tax is paid, the related interest and penalties will be waived, effectively resolving the dispute. Notably, this waiver is not applicable to cases involving fraudulent activity, improperly sanctioned refunds, or taxpayers who have already paid their penalties and interest.
Who does not fall under this scheme?
Taxpayers who have already paid their penalties and interest will not qualify for refunds under this scheme.
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