Thousands of registered businesses across India face outstanding tax liabilities resulting from the initial rollout of GST. Discrepancies between purchase ledgers and GSTR-2A, clerical mismatches in outward turnover, and delayed vendor filings triggered departmental audits and summary notices in Form GST DRC-01. While the basic tax in many disputes is manageable, accumulated interest under Section 50 at 18 percent per annum and statutory penalties often exceed the original tax amount.
To eliminate legacy litigation without compromising tax collection, Parliament inserted Section 128A into the Central Goods and Services Tax Act through Section 146 of the Finance (No. 2) Act 2024. In support of this statutory waiver, the Central Board of Indirect Taxes and Customs notified Rule 164 of the CGST Rules to define the digital application workflow. Understanding these conditions ensures businesses close eligible disputes cleanly without forfeiting statutory protections.
Statutory scope and covered tax periods under Section 128A
The conditional waiver under Section 128A of the CGST Act applies exclusively to non-fraud demands for specified tax periods. It covers proceedings across three operational stages:
- Notice or statement stage (clause a): Where a show cause notice was issued under Section 73(1) or a statement was served under Section 73(3), but no final adjudication order has been passed under Section 73(9).
- Adjudication order stage (clause b): Where an adjudication order was issued under Section 73(9), but no order has been passed by the Appellate Authority under Section 107(11) or the Revisional Authority under Section 108(1).
- Appellate order stage (clause c): Where an appellate order was passed under Section 107(11) or a revisional order was passed under Section 108(1), but no decision has been rendered by the Appellate Tribunal under Section 113(1).
The amnesty applies strictly to demands pertaining to the period from 1 July 2017 to 31 March 2020. This statutory window encompasses Financial Years 2017-18, 2018-19, and 2019-20. As clarified in CBIC Circular No. 238/32/2024-GST, if a composite notice or order covers both eligible tax periods up to 31 March 2020 and subsequent periods, the taxpayer can claim the waiver for the eligible portion upon discharging the tax attributed to that specific window.
Common mistake: Assuming that Section 128A applies to demand notices issued under Section 74. Section 128A explicitly excludes cases involving fraud, wilful misstatement, or suppression of facts. It also excludes any demand relating to an erroneous refund. If your order was issued under Section 74, Section 128A relief is unavailable unless the charge of fraud is set aside by an appellate authority.
Redetermination of Section 74 demands under Section 75(2)
Where the department originally issued a notice under Section 74 alleging fraud, taxpayers often challenge the validity of the fraud charge. Under the first proviso to Section 128A(1), if an Appellate Authority, Appellate Tribunal, or court establishes that the allegations of fraud or suppression are unsustainable and directs the proper officer to redetermine the tax payable under Section 73 in terms of Section 75(2), the taxpayer becomes eligible for the waiver. In such re-adjudicated matters, the taxpayer receives a six-month window from the date of communication of the redetermination order to pay the tax and apply for amnesty.
Procedural framework under Rule 164 of the CGST Rules
To implement Section 128A, the Central Government inserted Rule 164 into the CGST Rules vide Notification No. 20/2024-Central Tax. Rule 164 lays down the procedural steps, payment mechanisms, and application forms:
- Payment cutoff deadline: Under Notification No. 21/2024-Central Tax, the taxpayer must pay the full basic tax demanded in the notice or order on or before 31 March 2025.
- Application deadline: The application for waiver must be filed electronically on the GST portal within three months from the notified payment date, establishing a filing deadline of 30 June 2025.
- Form GST SPL-01 for pending notices: Under Rule 164(1), where proceedings are at the notice or statement stage under clause (a), the taxpayer pays the tax demanded via Form GST DRC-03 and files an application in Form GST SPL-01 citing the notice reference and DRC-03 payment details.
- Form GST SPL-02 for confirmed orders: Under Rule 164(2), where an adjudication order or appellate order has been passed under clause (b) or (c), the taxpayer must pay the tax by debiting the electronic liability register through the Payment Towards Demand facility, and submit Form GST SPL-02.
- Linking prior DRC-03 payments via Form GST DRC-03A: Under the second proviso to Rule 164(2), if a taxpayer had already deposited part or all of the demanded tax using Form GST DRC-03 before the order was uploaded, they must file an application in Form GST DRC-03A under Rule 142(2B) to map that payment against the debit entry in their electronic liability register before submitting Form GST SPL-02.
- Mandatory withdrawal of appeals: Under Rule 164(7), if the taxpayer filed an appeal before the First Appellate Authority or Tribunal, or a writ petition before the High Court or Supreme Court against the demand, the application must be accompanied by proof of withdrawal. If the withdrawal order is pending before the bench, the taxpayer must upload the withdrawal application copy, and then submit the final withdrawal order within one month of its issuance.
Notice risk: No refund of interest or penalty already paid. Section 128A(1) contains an unambiguous restriction: where a taxpayer already paid interest under Section 50 or penalties before seeking amnesty, no refund of such payments shall be granted. If you have already deposited interest and penalties under protest, evaluate whether continuing the appeal on legal merits under Section 73 limitation offers better financial recovery than accepting Section 128A closure.
Comparison of Form GST SPL-01 and Form GST SPL-02
The procedural path on the GST portal depends entirely on whether your case is at the notice stage or the order stage:
| Feature | Form GST SPL-01 | Form GST SPL-02 |
|---|---|---|
| Applicable stage | Notice under Section 73(1) or statement under 73(3) | Order under Section 73(9), Section 107(11), or Section 108(1) |
| Governing rule | Rule 164(1) of CGST Rules | Rule 164(2) of CGST Rules |
| Tax payment mode | Form GST DRC-03 (Voluntary / SCN settlement) | Electronic Liability Register (Payment towards Demand) |
| Pre-existing DRC-03 handling | Directly referenced in SPL-01 application | Must file Form GST DRC-03A first to adjust liability ledger |
| Appeal withdrawal proof | Not applicable (no order existed to appeal) | Mandatory if appeal or writ was filed against the order |
| Concluding order from officer | Form GST SPL-05 within 3 months | Form GST SPL-05 within 3 months |
Step by step: how to file Form GST SPL-02 on the GST portal
According to the official GSTN Help Document on Filing Form GST SPL-02, taxpayers must execute the following verified portal steps:
- Log in to GST portal: Access gst.gov.in with valid portal credentials.
- Navigate to waiver application: Navigate to Services > User Services > My Applications. In the Application Type dropdown menu, select Apply for Waiver Scheme under Section 128A, and click New Application.
- Select form type: Select Form GST SPL-02 (Application for waiver of interest or penalty or both under Section 128A(1)(b) and Section 128A(1)(c) in case of demand order), and click Create Application.
- Complete initial questionnaire: Answer the preliminary questions regarding whether the demand order was issued online or offline, whether an appeal was filed against the order, whether an application for withdrawal of appeal was submitted, and confirm that the demand does not involve fraud under Section 74 or erroneous refunds.
- Fetch order and verify demand details: Select the relevant Order ID from the dropdown list. Table 3A auto-populates the confirmed tax demand across CGST, SGST, IGST, and cess. If the demand contains ITC previously denied under Section 16(4) but subsequently legalized under Section 16(5) or 16(6), declare that deductible amount in Table 3B.
- Verify payment in Table 4: If tax was discharged via Payment Towards Demand, payment references auto-populate. If payment was made earlier via DRC-03, ensure that Form DRC-03A was submitted so the credit reflects in the liability ledger.
- Upload supporting documents: Upload proof of payment and the acknowledgement copy of the appeal withdrawal application. Up to 5 documents of up to 5 MB each in PDF or JPEG format are permitted.
- Sign and file: Complete the verification declaration, select the Authorized Signatory, enter Place, and submit using DSC or EVC. The portal generates an Application Reference Number (ARN) acknowledging the filing.
Departmental adjudication and conclusion under Form GST SPL-05
Submitting Form GST SPL-01 or SPL-02 initiates a time-bound review by the jurisdictional proper officer under Rule 164(8) to Rule 164(14):
- Issuance of acceptance order (Form GST SPL-05): Under Rule 164(10), if the proper officer is satisfied that the taxpayer fulfilled all statutory conditions, the officer issues an order in Form GST SPL-05 concluding the proceedings. Under Rule 164(13)(a), this order must be issued within three months from the receipt of the application.
- Issuance of rejection notice (Form GST SPL-03): Under Rule 164(8), if the officer finds that the application is ineligible, such as an incomplete tax deposit or an unwithdrawn appeal, the officer must issue a notice in Form GST SPL-03 within three months, detailing the grounds and offering an opportunity of personal hearing.
- Taxpayer reply (Form GST SPL-04): Under Rule 164(9), the taxpayer can submit a written explanation and supporting documents on the portal in Form GST SPL-04 within one month of receiving Form GST SPL-03.
- Deemed conclusion of proceedings: Under Rule 164(14), if the proper officer fails to issue an order within the three-month statutory period, the application in Form GST SPL-01 or Form GST SPL-02 is deemed to be approved and proceedings stand concluded by operation of law.
Worked example: rupee savings under Section 128A amnesty
Consider Apex Heavy Engineering Private Limited, an industrial equipment manufacturer based in Ahmedabad, Gujarat. During the audit for Financial Year 2018-19, the department identified that input tax credit of ₹10,00,000 was claimed in GSTR-3B on supplies where the vendor had belatedly uploaded invoices in GSTR-1. The proper officer issued an adjudication order under Section 73(9) in Form GST DRC-07 confirming tax, interest, and penalty.
The financial impact of settling through the standard recovery route versus the Section 128A amnesty scheme is set out below:
| Liability head | Under standard Section 73(9) order | Under Section 128A amnesty | Net financial waiver |
|---|---|---|---|
| Basic tax liability | ₹10,00,000 | ₹10,00,000 | ₹0 |
| Interest under Section 50 (18% for 5.1 years) | ₹9,20,000 | ₹0 (Waived) | ₹9,20,000 |
| Penalty under Section 73(9) (10% of tax) | ₹1,00,000 | ₹0 (Waived) | ₹1,00,000 |
| Total payable liability | ₹20,20,000 | ₹10,00,000 | ₹10,20,000 |
By opting for Section 128A and paying the principal tax of ₹10,00,000 before the notified deadline, Apex Heavy Engineering Private Limited eliminated ₹9,20,000 in accumulated interest and ₹1,00,000 in statutory penalty. The company reduced its total cash outflow from ₹20,20,000 to ₹10,00,000, achieving a financial saving of over 50 percent of the total demanded liability.
Strategic considerations: amnesty versus limitation defense
Before applying for Section 128A, tax practitioners must evaluate whether the underlying notice or order suffers from fatal jurisdictional defects. As explained in our guide on GST SCN time limits under Section 73 and 74, any adjudication order passed beyond the limitation period specified in Section 73(10) is deemed void ab initio under Section 75(10).
If the department served an SCN for FY 2017-18 after 30 September 2023, or an SCN for FY 2018-19 after 31 January 2024, the notice violated the mandatory three-month cutoff under Section 73(2). Similarly, if an adjudication order for FY 2018-19 was uploaded after the extended deadline of 30 April 2024 fixed by Notification No. 56/2023-Central Tax, the demand is legally extinguished. In such instances, paying the basic tax under Section 128A results in paying an unenforceable demand. Businesses should consult a qualified professional to compare the certainty of amnesty against the merits of a limitation defense.
Related guides
- GST departmental audit under Section 65 notice Form GST ADT-01 procedure, records checklist, and findings ADT-02
- GST notice Form DRC-01D: recovery under Rule 142B and how to file reply
- GST notice form DRC-01C Part B reply format: reasons for difference
Frequently asked questions
Which tax periods qualify for waiver under Section 128A?
Section 128A covers demand notices and adjudication orders pertaining to the initial three financial years of GST: FY 2017-18, FY 2018-19, and FY 2019-20. Demands relating to FY 2020-21 onwards are not eligible for this amnesty.
What is the difference between Form GST SPL-01 and Form GST SPL-02?
Form GST SPL-01 is filed where proceedings are pending at the show cause notice or statement stage under Section 73(1) or Section 73(3) and no order has been passed. Form GST SPL-02 is filed where an adjudication order has been passed under Section 73(9), or an appellate order has been passed under Section 107(11) or Section 108(1).
Can a taxpayer get a refund of interest and penalty already paid?
No. Under the express terms of Section 128A(1) and Rule 164, no refund is granted for any amount of interest or penalty that was already deposited prior to the commencement of the scheme.
What happens if a show cause notice was issued under Section 74?
Section 128A strictly excludes cases of fraud, wilful misstatement, or suppression of facts initiated under Section 74. However, if an appellate authority, tribunal, or court concludes under Section 75(2) that the charges of fraud are unproven and directs the tax to be redetermined as a Section 73 demand, the taxpayer can avail of Section 128A by paying the redetermined tax within six months.
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Last checked: 19 October 2026. Sources: CBIC CGST Act Section 128A, Notification No. 20/2024-Central Tax (Rule 164), Notification No. 21/2024-Central Tax, CBIC Circular No. 238/32/2024-GST, GSTN Guide on Form GST SPL-02.