Instruction No. 02/2025-GST dated February 07, 2025

CBIC issued procedure to be followed in department appeal filed against interest and/or penalty only, related to Section 128A of the CGST Act

CBIC has issued an updated procedure for departmental appeals filed against interest and/or penalty only, related to Section 128A of the CGST Act, 2017. Section 128A, read with Rule 164 of the CGST Rules, provides for the waiver of interest or penalty or both for demands under Section 73 of the CGST Act for Financial Years 2017-18, 2018-19, and 2019-20, subject to certain conditions. The Circular No. 238/32/2024-GST dated October 15, 2024, had clarified various doubts related to Section 128A. The Board has now decided that if a taxpayer has fully paid the tax amount and the department is in appeal or filing an appeal only due to wrong interest calculation or wrong imposition/non-imposition of penalty, and the taxpayer fulfills other conditions of Section 128A, the proper officer may withdraw the appeal or accept the order under review. This decision aims to reduce litigation and ensure taxpayers are not denied benefits due to technicalities.

Source : https://taxinformation.cbic.gov.in/view-pdf/1000529/ENG/Instructions