The Central Board of Indirect Taxes and Customs (CBIC) has recently issued an important circular providing crucial clarifications for taxpayers regarding the implementation of Section 128A of the CGST Act. Let’s break down the key points that every taxpayer should know.
Payments Made Before 1st November 2024
Eligibility for Tax Benefit
The circular addresses two primary concerns for taxpayers:
- Retroactive Payment Recognition: If you have already paid taxes through FORM GSTR-3B before 1st November 2024, you can still be eligible for benefits under Section 128A. This is a significant relief for taxpayers who have made payments prior to the section’s formal implementation.
- Verification Process: While these payments will be considered, they are subject to verification by the proper officer. This means taxpayers should maintain proper documentation of their tax payments.
Partial Period Coverage
Handling Mixed Period Notices
For notices or orders that span periods partially covered and partially outside Section 128A, the circular provides a clear pathway:
- Taxpayers can file an application using FORM SPL-01 or FORM SPL-02 after paying tax liability for periods covered under Section 128A.
- They must intimate the appellate authority about their intent to avail the section’s benefits and clarify they won’t pursue appeals for the specified period (FY 2017-18 to 2019-20).
- The Appellate Authority will then pass orders for the remaining periods as deemed appropriate.
Key Compliance Requirements
Payment Modes
- For availing benefits on or after 1st November 2024, payments must be made through:
- FORM GST DRC-03 for tax demands
- Electronic liability register for specific order types
Takeaways for Taxpayers
- Retain all payment records from before 1st November 2024
- Be prepared for verification of prior payments
- Follow the specified procedures for partial period notices
- Use the correct forms (SPL-01/SPL-02) when applying for benefits
Conclusion
This circular provides much-needed clarity and offers a pragmatic approach to implementing Section 128A, giving taxpayers flexibility and a clear compliance path.