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Understanding the GST Amnesty Scheme: Criteria, Advantages, and Obstacles

The GST Amnesty Scheme provides taxpayers with relief for unfiled GSTR-3B returns, offering reduced late fees and broader compliance opportunities. Recent updates include a 2024 scheme for conditional waiver of interest and penalties on past demands, and extensions for various return filings and registration revocations. Despite its benefits, challenges such as the absence of interest waivers and issues with Input Tax Credit claims persist, prompting calls for expanded scope and revisions to fully support taxpayer compliance.

📖 4 min read read🏷️ GST Amnesty Scheme

The government introduced the GST Amnesty Scheme to offer relief to taxpayers who had not submitted their GSTR-3B returns for earlier tax periods. This article provides comprehensive information on the scheme's applicability, advantages, operational aspects, and recent updates. It also covers late fee reductions, outstanding issues, and potential remedies.

Latest Updates

June 11th, 2025

As of June 8th, 2025, over 300,000 waiver applications (SPL-01/02) were filed. The GSTN has addressed technical difficulties preventing certain taxpayers from submitting amnesty applications under Section 128A of the CGST Act, with resolutions detailed in a later section.

May 14th, 2025

GST withdrawal applications (APL 01W) submitted prior to the final acknowledgment (APL 02) are automatically approved, updating the appeal status to 'Appeal withdrawn'. Submissions made after this stage require Appellate Authority approval. For Section 128A, pending appeals must be resolved, necessitating taxpayers to upload proof of 'Appeal withdrawn' status when filing waiver applications. Learn more

March 26th, 2025

On March 26th, 2025, the CGST 21/2024 Notification introduced a new GST Amnesty Scheme for 2024, utilizing Section 128A. This scheme conditionally waives interest and penalties on tax demands from FY 2017-18 to 2019-20 under CGST Section 73. Eligibility requires complete payment of outstanding tax liabilities by March 31st, 2025. View Notification

February 7th, 2025

On February 7th, 2025, Instruction No. 02/2025-GST clarified that taxpayers who have fully remitted their taxes, but are subject to departmental appeals solely concerning interest or penalty calculation discrepancies, remain eligible for the Amnesty scheme under Section 128A. Read Instructions

January 14th, 2025

As of January 14th, 2025, Forms GST SPL 01 and SPL 02 are accessible on the GST portal here. To be eligible for waivers, appeal applications must be withdrawn. APL 01 withdrawals for appeals before the First Appellate Authority can be processed via the GST portal. For APL 01 applications filed prior to March 21st, 2023, withdrawal requests necessitate approval from the Appellate Authority, State Nodal officer, and GSTN.

Defining the GST Amnesty Scheme

The GST Amnesty Scheme was initially announced to cover periods from July 2017 to September 2018, offering a one-time filing extension for pending returns until March 31st, 2019.

In early 2020, various tax professionals and industry leaders advocated for reopening the scheme due to the COVID-19 pandemic. The government subsequently granted this request.

CBIC officially launched the second iteration of the GST Amnesty Scheme on June 1st, 2021. It applied to all outstanding GSTR-3B returns for tax periods between July 2017 and April 2021.

During its 49th meeting in February 2023, the GST Council proposed implementing an amnesty scheme for taxpayers who had not filed GSTR-4, GSTR-10, and GSTR-9 for past financial years. Additionally, the Council suggested providing relief to those whose GST registrations were cancelled, by extending the period for revoking such cancellations. Furthermore, Section 62 would not be invoked against certain taxpayers who failed to furnish returns by the notice's deadline, provided they filed on or before June 30th, 2023.

For the first time, in its 53rd meeting, the GST Council recommended introducing Section 128A, which allows for the waiver of interest and penalties. Following this, Rule 164 was introduced in the 54th GST Council meeting, becoming effective from November 1st, 2024, through notification No.20/2024-Central tax dated October 8th, 2024. Subsequently, CBIC issued circular no. 238/32/2024-GST to clarify various aspects related to Section 128A of the CGST Act, 2017.

Introduction to the 2024 GST Amnesty Scheme

  • The new GST Amnesty Scheme, under Section 128A, became effective on November 1st, 2024.
  • This scheme allows taxpayers who have received notices under Section 73 of the CGST Act for FY 2017-18, 2018-19, and 2019-20 to request a waiver of interest and penalty.
  • No refunds will be issued if interest and penalties have already been paid.
  • The department clarified that this provision aims to reduce litigation, ensuring eligible taxpayers are not denied benefits due to minor technicalities. Proper officers are instructed to withdraw such departmental appeals or accept the order if it is still under review.

Details of the 2023 GST Amnesty Scheme

CBIC released new Central Tax notifications on March 31st, 2023, to implement the 2023 GST amnesty scheme. Notifications 02/2023, 03/2023, 06/2023, 07/2023, and 08/2023 are explained in the table below:

Notification NumberName of form/actionWho can availAmnesty benefitsValidity to avail benefit
02/2023GSTR-4 (quarterly/annual)Composition taxable persons who did not file GSTR-4 for quarters July 2017 to March 2019 or for the financial years from FY 2019-20 to FY 2021-22 on or before due dates(1) Other than Nil return - Late fee fixed at max Rs. 500 (i.e. Rs.250 each for CGST and SGST Act) per return. (2) Nil return - No Late feeFile between 1st April 2023-30th June 2023
03/2023GST REG-21: Application for revocation of cancellation of GST registrationAny taxpayer whose GST registration is cancelled by GST officer on or before 31st December 2022 for the following reasons: - Failure to file returns for six months/two quarters continuously - Failure to conduct business for continuous period of six months from the date of registration. And Such taxpayer did not apply for revocation in REG-21 within 30 days from the date of service of the cancellation order by the GST officer. Note: Irrespective of fact that appeal was filed and rejected on grounds of not meeting the time limit of revocation.Can file REG-21 in extended time period. Condition: File all pending returns with taxes, late fee and interest, as applicable up to date of cancellation of GST registration.File on or before 30th June 2023
06/2023Any pending GST returns potentially attracting Section 62 of the CGST ActAny taxpayer who defaulted filing of any GST return (GSTR-1/3B/4) within 30 days from the service of the assessment order issued on or before the 28th February 2023.Deemed withdrawal of best judgement assessment order under Section 62 of the CGST Act, even if an appeal is filed or decided. Condition: File all such pending returns with taxes, late fee and interest, as applicable.File on or before 30th June 2023
07/2023GSTR-9 (annual return)Registered regular taxpayers mandated to file GSTR-9 from FY 2017-18 to FY 2021-22 but have not filed on or before the respective due dates.Can file GSTR-9 at concessional late fee of maximum Rs.20,000. (i.e., 10,000 each under CGST and SGST Act). The late fee is waived off in excess of Rs.20,000 for delayed filing of GSTR-9 for years 2017-18 up to 2021-22.File between 1st April 2023-30th June 2023
08/2023GSTR-10 (Final return)Taxpayers whose GST registration is cancelled within three months of the date of cancellation or date of order of cancellation, whichever is laterCan file GSTR-10 at a concessional late fee of maximum Rs.1,000. (i.e., 500 each under CGST and SGST Act). The late fee is waived off in excess of Rs.1,000 for delayed filing of GSTR-10.File between 1st April 2023-30th June 2023

Duration of the 2021 GST Amnesty Scheme

According to Central Tax notification number 33/2021, issued on August 29th, 2021, the GST amnesty scheme's validity was extended from August 31st, 2021, to November 30th, 2021. This meant taxpayers with pending GSTR-3B returns for periods between July 2017 and April 2021 could file them by November 30th, 2021, with a reduced maximum late fee.

Previously, as per CBIC’s Central Tax notification number 19/2021, issued on June 1st, 2021, the GST amnesty scheme was applicable from June 1st, 2021, to August 31st, 2021. During this period, any taxpayer who had not filed GSTR-3B by the due dates for tax periods from July 2017 to April 2021 could file within that specific deadline on the GST portal.

Advantages of the GST Amnesty Initiative

Taxpayers are unable to file GSTR-3B for a specific tax period without first submitting previous periods' returns. Furthermore, if a taxpayer fails to file GSTR-3B for six consecutive tax periods or three consecutive quarters, their GST registration may be cancelled. This can negatively impact their business, as clients or GST registered customers might hesitate to engage with them, potentially leading to contract cancellations. Therefore, GSTR-3B compliance is crucial for smooth business operations.

This relief package benefits taxpayers by alleviating the burden of substantial late fees, which often deter them from filing pending GSTR-3B returns. Additionally, it aids businesses in recovering after experiencing severe disruptions from lockdowns and challenging economic conditions caused by the pandemic.

Late Fee Concessions within the 2021 GST Amnesty Scheme

Under the GST Amnesty Scheme, taxpayers receive a concession on the late fee payable. The maximum late fee is capped at Rs.1,000 per return (comprising Rs.500 under CGST and Rs.500 under SGST) for GSTR-3B filings with any tax liability other than a nil return.

For a nil GSTR-3B filing, the maximum late fee is set at Rs.500 per return (Rs.250 each under CGST and SGST). In essence, the late fee due for such a return will be the lesser of two amounts: the total late fees calculated under the Act for each day of delay, or the maximum late fee as specified above.

For example, if XYZ & Co failed to file GSTR-3B for January 2021, due by February 20th, 2021, but now wishes to file it on August 2nd, 2021, the late fee according to the Act would be Rs.8,150 for 163 days of delay (at Rs.50 per day) for a GSTR-3B with tax liability. However, under the scheme, the maximum late fee for the January 2021 GSTR-3B return is limited to Rs.1,000. Therefore, XYZ & Co is required to pay a late fee of Rs.1,000, along with the applicable tax liability and interest under the Act, for filing this return.

Addressing Application Issues for the GST Amnesty Scheme

Taxpayers might encounter technical problems when submitting applications for GST amnesty. The GSTN released an advisory on June 11th, 2025, detailing resolutions. Follow these steps:

  1. Enter 'No' in response to 'Whether the demand order is issued through the GST portal'.
  2. Input the order number prefixed with 'ONL' in the 'Details of demand order' field. For instance, if the online order number is ABCDE12345X1Z2, enter 'ONLABCDE12345X1Z2'. Entering it without the prefix will cause the GST system to consider it a manual filing.
  3. Select the mobile number and email ID from the dropdown menu. Manually enter any editable details under 'Basic details'.
  4. Manually input order details, payment details, and information related to the demand.

There are two possible payment scenarios for demanded tax:

  • Using DRC-03: Provide relevant payment details in Table-4.
  • Using ‘Payment towards demand’ option: These payment details cannot be entered in Table-4. Instead, taxpayers must upload such payment details separately.

Difficulties and Concerns with the GST Amnesty Scheme

Despite the scheme's objective to assist non-filers in continuing their businesses by accurately declaring GST data, it has faced certain obstacles. Several challenges and issues emerged with the GST Amnesty Scheme.

No Relaxation in Interest Dues

Taxpayers with a tax liability who failed to file GSTR-3B do not receive an interest waiver; only the maximum late fee is reduced if they file before August 31st, 2021.

Non-Admissibility of Input Tax Credit

Some tax professionals have raised concerns regarding the non-admissibility of Input Tax Credit (ITC) under the GST Amnesty Scheme. The question of ITC admissibility under this scheme is a significant issue. While the amnesty scheme permits tax payments for previous periods, it remains silent on ITC claims within the same return for that preceding financial year.

The CGST Act specifies a time limit for ITC claims. ITC on a tax invoice or debit note issued in a financial year can be claimed by the earlier of two dates: the due date for filing GSTR-3B for September of the following financial year, or the annual return. For example, if the due date for filing GSTR-3B for September 2020 was October 20th, 2020, and the annual return (GSTR-9) was scheduled for December 31st, 2020, then the latest time to claim ITC for FY 2019-20 was October 20th, 2020, in the September GSTR-3B.

Although the government extended the time limit for filing GSTR-3B for preceding tax periods by reducing late fees, it did not extend the time limit for claiming ITC for those same periods. This legally prohibits a taxpayer from reporting ITC when filing GSTR-3B for a past tax period. Consequently, the recipient cannot claim such ITC under the amnesty scheme.

No Relief for Late Filing of GSTR-1 Under the Scheme

The GSTR-1 return is not included in the scheme. Therefore, no late fee waiver or relief is provided for filing pending GSTR-1 for the same tax period as the GSTR-3B that the taxpayer intends to file.

Revocation of Cancelled GST Registration

It is important to note that without an active GSTIN, taxpayers cannot file pending GSTR-3B returns.

CBIC issued a press release and Central Tax notification number 34/2021 on August 29th, 2021. This extended the time limit to apply for revocation of GST registration until September 30th, 2021, if GSTINs were cancelled between March 1st, 2020, and August 31st, 2021, due to non-filing of GSTR-3B (under Section 29(2) clauses (b) and (c) of the CGST Act).

Before August 29th, there was no clarity regarding the restoration or revocation of GSTINs already cancelled due to non-filing of past GSTR-3B returns, particularly when an aggrieved taxpayer had filed an appeal.

Proposed Solutions for Existing Challenges

To ensure taxpayers fully benefit from the scheme, these aspects should be reviewed. The government ought to broaden the scheme's scope to encompass GSTR-1, GSTR-9, GSTR-10, and permit ITC from past periods where the time limit has lapsed. Crucially, options for revising returns must be made available to recipients of such ITC. Therefore, the government should promptly address these inconsistencies and rectify the legal gaps.

Further Reading

Frequently Asked Questions

What is the purpose of Goods and Services Tax (GST) in India?
The Goods and Services Tax (GST) in India is a consumption-based tax levied on the supply of goods and services. Its primary purpose is to simplify the indirect tax structure, reduce the cascading effect of taxes, and create a common national market, thereby promoting economic growth and transparency.
How many types of GST are there in India?
In India, there are four main types of GST: Central Goods and Services Tax (CGST) levied by the Central Government, State Goods and Services Tax (SGST) levied by State Governments, Integrated Goods and Services Tax (IGST) levied by the Central Government on inter-state supplies and imports, and Union Territory Goods and Services Tax (UTGST) for supplies within Union Territories.
Who is required to register for GST in India?
Businesses and individuals involved in the supply of goods or services are generally required to register for GST if their aggregate turnover exceeds a specified threshold limit, which varies for goods and services and across different states. Certain businesses are also mandated to register regardless of turnover.
What is Input Tax Credit (ITC) under GST?
Input Tax Credit (ITC) is a mechanism under GST that allows taxpayers to claim credit for the GST paid on purchases of goods and services used for business purposes. This credit can then be utilized to offset the GST liability on their outward supplies, effectively avoiding double taxation.
What are the consequences of not filing GST returns on time?
Failure to file GST returns on time can lead to various consequences, including late fees, interest on delayed tax payments, and penalties. Additionally, it can impact the recipient's ability to claim Input Tax Credit, disrupt business operations, and may even lead to the cancellation of GST registration.
What happens if a business's GST registration is cancelled?
If a business's GST registration is cancelled, it can no longer collect GST from customers, claim Input Tax Credit, or issue tax invoices. This severely impacts its ability to conduct business legally and participate in the GST ecosystem. Reinstatement typically involves specific application processes and compliance with pending requirements.
Can I claim Input Tax Credit indefinitely under GST?
No, there is a time limit to claim Input Tax Credit (ITC) under GST. Generally, ITC for a financial year must be claimed by the due date for filing the GSTR-3B for September of the following financial year, or the date of filing the annual return (GSTR-9) for that financial year, whichever is earlier. After this period, the credit lapses.

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