GST WEEKLY UPDATE : 50/2024-25 (16.03.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. Andhra Pradesh GST Dept issued Notification on Waiver of Interest and Penalty for Tax Payments:

The Andhra Pradesh GST Department issued Notification No. G.O. Ms. No. 94 dated March 13, 2025. It specifies the dates by which registered persons can make tax payments to waive interest or penalty under Section 128A of the Andhra Pradesh Goods and Services Tax Act, 2017. For those with notices/orders under Section 128A, the deadline is March 31, 2025. For those with notices under Section 74 and subsequent orders, the deadline is six months from the order issuance date. The notification is effective from November 1, 2024.

In exercise of the powers conferred by sub-section (1) of section 128A of the Andhra Pradesh Goods and Services Tax Act, 2017 (Act No.16 of 2017) (the said Act), the Government of Andhra Pradesh, on the recommendations of the Goods and Council, hereby notifies the respective date specified in Column (3) of the Table below, as the date upto which payment for the tax payable as per the notice, or statement, or the order referred to in clause (a) or clause (b) or clause (c) of the said section, as the case may be, can be made by the class of registered person specified in the corresponding entry in column (2) of the said Table, namely: –

Table

This notification shall come into effect from the 1st day of November, 2024. 

2. General FAQ of amnesty schme:25 February 2025 DGTPS Bangalore Zone:

• Tax amount adjust by the officer before the scheme ?
• Whether amount recovered by the tax officers as tax due from any other person on behalf of the taxpayer, against a particular demand can be considered as tax paid towards
• Answer ▪ Yes.

▪ But the amount recovered as Interest and Penalty can not be refunded.

• Payment made voluntary before the scheme

 —Whether the benefit provided under Section 128A will be applicable in cases, where the tax due has already been paid and the notice or demand orders under Section 73 only pertains to interest and/or penalty involved?

 —Answer ▪ Yes

• Eligibility for Multiple tax periods..

—Where the notice/order involves multiple periods, ranging from the period for which waiver provided in Section 128A is applicable ?

—Answer ▪ The taxpayer is eligible to apply for waiver of interest or penalty or both, in such cases where the demand notice/ order spans tax periods covered under Section 128A and those not covered under the said section.

• Eligibility Multiple issues ?

—Where the notice/ statement/ order issued under Section 73 involves multiple issues and one of them is regarding demand of erroneous refund, whether an application can be filed for waiver of interest or penalty or both under Section 128A?

—Answer ▪ Yes.

▪ However, as per sub-rule (3) of Rule 164, the taxpayer shall be required to pay the full amount of tax demanded in the notice/ statement / order, as the case may be, including on account of demand of erroneous refund, to avail the benefit of waiver of interest or penalty or both under Section 128A

• What if happens if department has filed appeal ?

—In cases where department has filed an appeal against the order mentioned in clause (b) or clause (c) of sub-section (1) of section 128A and the Appellate Authority or the Appellate Tribunal or the court or the Revisional Authority.

 —Answer ▪ Yes, as per the second proviso to section 128A, the conclusion of proceedings in such cases is subject to the condition that the said person pays the additional amount of tax payable, if any, in accordance with the order of the Appellate Authority or the Appellate Tribunal or the court or the Revisional Authority, as the case may be, within three months from the date of the said order.

• Applicability of scheme for IGST and Cess —Whether the benefit provided under Section 128A will be available for matters involving IGST and Compensation Cess?

 —Answer ▪ Yes. ▪ In this regard, it is mentioned that in such cases, full payment of tax means payment of CGST, SGST, IGST and compensation cess demanded in the notice/ statement/ order, as the case may be.

• Demand on account of Transitional credit ?

—Whether Section 128A covers cases involving demand of irregularly availed transition credit?

—Answer ▪ Yes ▪ transitional credit and notice for demand of wrongly availed credit is issued under section 73, the same is covered under Section 128A.

• Late fee and Fine not covered:

—Whether Section 128A will cover waiver of penalties under other provisions, late fee, redemption fine etc. ?

—Answer ▪ Any penalty, including penalties under section 73, section 122, section 125 etc., demanded under the demand notice/ statement/ order issued under section 73, is covered under the waiver provided under Section 128A.

▪ However, late fee, redemption fine etc. are not covered under the waiver provided under Section 128A

• Mode of payment:

 —Whether payment to avail waiver under Section 128A can be made by utilizing ITC?

—Answer ▪ Yes.

Can be paid either by debiting from electronic cash ledger or by utilizing the Input Tax Credit (ITC), by debiting the electronic credit ledger, or partly from both. ▪ However, where the demand is in respect of any amount of tax to be paid by the recipient under Reverse Charge Mechanism or by the Electronic Commerce Operator under section 9(5), then the said amount shall be required to be paid by debiting the electronic cash ledger only and not through the electronic credit ledger.

• Section 16(4) and other issues?

 —Whether the entire tax amount demanded in the notice/ statement/ order issued under Section 16 (4) has to be paid in such cases, to avail the benefit under section 128A?

—Answer ▪ the applicant is required to pay only the amount that is payable, calculated after deducting the amount not payable in accordance with sub-section (5) or subsection (6) of Section 16, from the amount payable in terms of the notice or statement or order under section 73, as the case may be, before submitting the application.

• Link DRC-03 to Demand:

 —Taxpayer can pay the demanded tax amount through the “payment towards demand” facility in case of demand orders and through Form GST DRC-03 in case of notices. However, if payment has already been done through Form GST DRC-03 for any demand order then taxpayer need to link the said Form GST DRC 03 with such demand order through Form GST DRC-03A, which is now available on the common portal.

▪ (Ref GSTN Advisory for waiver scheme under SECTION 128A dated Nov 8th, 2024)

—In cases where order in FORM GST DRC-07, FORM GST DRC-08 or FORM GST APL-04, as the case may be, has been issued and such taxpayer has paid required amount through FORM GST DRC-03, such applicant is required to adjust the said amount towards the demand created in the Electronic Liability Register, as per the second proviso to sub-rule (2) of rule 164, before filing the application in FORM GST SPL-02. 

3. AAR & Judicial Decisions:

             (i) The Hon’ble Madras High Court of Madurai Bench, allowed refund claim by the assessee of the Integrated Goods and Services Tax (“the IGST”) refund for exports that would qualify as zero -rated supply.

             (Applicant – M/s Modern India Products)

The Hon’ble Madras High Court of Madurai Bench, allowed refund claim by the assessee of the Integrated Goods and Services Tax (“the IGST”) refund for exports that would qualify as zero -rated supply. While Circular No. 37/2018-Customs dated October 09, 2018 (“the Circular”) relied upon by Standing Counsel to state that if duty drawback is claimed, refund of IGST amount cannot be sought. The Court relied on the Hon’ble Gujarat High Court case wherein it was held that the Circular cannot prevail over Rule 96 of the CGST Rules.

The Hon’ble Madras High Court of Madurai Bench in Writ Application (MD) No. 1559 of 2021 held as under:

• Noted that, the Circular states that if duty drawback is claimed, refund of IGST amount cannot be sought.
• Relied on, M/s. Amit Cotton Industries v. Principal Commissioner of Customs [R/Special Civil Application No. 20126 of 2018 dated June 27, 2018] wherein the Division Bench of the Hon’ble High Court held that the Circular cannot prevail over Rule 96 of the CGST Rules. The Hon’ble Division Bench observed that the circular will not save the situation for the Department. This decision was followed by the Madras High Court in the decision reported in M/s. Precot Meridian Limited v. The Commissioner of Customs, The Assistant Commissioner of Customs [W.P. (MD) No. 20504 of 2019 dated November 19, 2019].
• Held that, several other High Courts have taken the very same view. Since the single Judge bench granted relief to the Petitioner only by following the existing legal position, interference with the said order is not warranted.

(ii) Guwahati High court decision regarding Carbonated juices to attract 12% GST, not 28%:

(Applicant – X’SS Beverage)

The Gauhati high court has held that fruit pulp and juice based carbonated drinks are not just “water or carbonated water alone.” That means they attract a lower Goods and Services Tax (GST)— falling under the lower 12% GST slab instead of the steep 28% demanded by tax authorities. The HC order has effectively fizzed out the GST demand (plus penalty and interest) imposed on X’SS Beverage — a manufacturer and seller of a range of carbonated juice drinks.

While the GST authorities contended that since the beverages contained carbonated water, they should be taxed at the higher rate which is applicable to soft drinks. In contrast, X’SS Beverage maintained that the predominant ingredient in its products was fruit juice, which gave the drinks their essential character, making them eligible for a lower tax rate.

The Gauhati high court relied on the Rules for Interpretation of the Customs Tariff Act, 1975, emphasising that in cases where products do not fit precisely into a single category, they should be classified under the heading most appropriate to their essential nature. The court also referred to scientific principles and judicial precedents such as in the case of Parle Agro’s ‘Appy Fizz.’ This being a high court judgement will set legal precedence.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(The author is well known Chartered accountant practicing in direct and indirect taxes)