GST taxpayers (Image source: iStock)
Photo: iStock
New Delhi: The government has announced important changes in the Goods and services tax (GST), which offer companies relief by waiving certain interest and penalties on past tax claims. This new provision, effective from November 1, falls under Section 128A, allowing GST authorities to grant exemptions and reduce the compliance burden on taxpayers.
The relief is aimed at cases where tax claims were raised under section 73 of the GST Act, which deals with non-fraudulent tax issues. The decision was taken during the 53rd meeting of the GST Council, with the aim of resolving disputes that arose due to misunderstanding or misinterpretation of the law, rather than intentional tax evasion.
Who is eligible for the exemption?
The exemption applies to taxpayers assessed under Section 73 for the financial years 2017-18, 2018-19 and 2019-20. Only those whose tax matters are free of allegations of fraud, misrepresentation or suppression of facts are eligible. Taxpayers involved in disputes for non-fraudulent reasons can benefit from the plan if they agree to resolve the tax claim and stop any ongoing litigation.
How does the exemption work?
To take advantage of the exemption, companies must accept the tax requirement and pay the amount due by March 31, 2025. Once the tax is paid, the associated interest and penalties will be waived, resolving the dispute. However, this exemption does not apply to cases involving fraudulent activity, improperly sanctioned refunds, or taxpayers who have already paid their penalties and interest.
Who is not eligible for the plan?
Taxpayers who have already paid penalties and interest will not be eligible for refunds under this scheme.
This new provision is expected to provide much-needed relief to companies facing past tax claims and help close long-standing disputes.
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