Action Required by 31-03-2025: GST Amnesty Scheme Under Section 128A

The GST Amnesty Scheme under Section 128A is a one-time compliance window designed to encourage voluntary rectification of past defaults. It reduces the cost of compliance for many small and medium taxpayers and unclogs administrative backlogs by allowing authorities to recover previously unclaimed revenue with minimal litigation. The scheme is not intended for those involved in fraud or willful evasion but rather for businesses wanting to regularise inadvertent or procedural lapses.

The amnesty covers several categories of relief. Key areas include waiver or reduction of late fees for specified returns, filing of multiple pending returns at concessional fees, revocation of cancelled registrations upon fulfilment of simplified conditions, and reduced penalties for certain non-fraud procedural offenses. Notably, the scheme excludes matters involving prosecution, fraud, or intentional misstatement.

• Late fee waivers for delayed GSTR-3B, GSTR-1, GSTR-4 and annual returns where eligible.
• Filing of multiple pending periods together under capped late fees.
• Revocation facility for registrations cancelled due to non-filing, subject to filing all dues within the window.
• Limited penalty relief for specific procedural contraventions.

Eligible taxpayers include registered persons who have failed to file returns, composition taxpayers with missed filings, and businesses whose GST registrations were cancelled for non-compliance. The window is intended for ordinary non-compliance—cases of fraud, material mis-statement, or those already under prosecution are excluded. Careful self-assessment is necessary before applying to ensure eligibility.

• Eligible: Non-filers, cancelled registrants seeking revocation, small taxpayers with multiple pending periods.
• Ineligible: Cases with proven fraud, ongoing criminal proceedings, wilful tax evasion, or where false documents were used.

Late Fee Relief

Late fees for delayed returns are capped or waived depending on the return type and the taxpayer’s classification. This makes it cost-effective to file historical returns rather than litigate or wait for notices.

Revocation of Cancellation

For taxpayers whose registration was cancelled for non-filing, revocation can be sought upon filing all pending returns and clearing dues. The process has been simplified to expedite restoration of legal status.

Penalty Reductions

Certain technical or procedural penalties are reduced when the taxpayer files returns and pays tax plus interest within the amnesty window. This is not available where intentional misconduct is established.

ITC Unlocking

Filing returns can unlock blocked Input Tax Credit (ITC) for legitimate purchases—restoring working capital for many businesses.

To obtain relief, taxpayers must file all pending returns within the amnesty period, pay tax and interest in full, and settle reduced late fees. Any ITC mismatches must be reconciled. Revocation applicants must file returns, pay dues and submit the requisite application for revocation before the deadline. Non-fulfilment of these conditions disqualifies the taxpayer from amnesty benefits.

• All pending returns filed within window.
• Full payment of tax and interest; late fees as per concessional schedule.
• Reconciliation of mismatched ITC entries.
• Revocation application submitted before 31-03-2025 where relevant.

Step 1 — Identify Pending Returns and Reconcile

Extract GST compliance reports, reconcile sales and purchase ledgers with GSTR-2A/2B, and list all pending return periods.

Step 2 — Compute Tax, Interest & Reduced Late Fees

Calculate exact tax liabilities, interest for late payment and the concessional late fees payable under Section 128A.

Step 3 — Pay Dues and File Returns

Make payments via the GST portal and file all pending returns accurately within the window.

Step 4 — Apply for Revocation (If Applicable)

Submit a revocation application, attach payment evidence and pending returns, and comply with any additional portal requirements for restoration.

Step 5 — Retain Evidence & Monitor Status

Download acknowledgements, payment challans and updated compliance status; monitor revocation progress and notifications.

• Reduce cumulative late fees and penalties significantly compared to post-deadline liabilities.
• Restore GST registration and resume issuing tax invoices legally.
• Unlock legitimate Input Tax Credit and improve cash flow.
• Avoid prolonged litigation and prosecution for procedural defaults.
• Improve compliance reputation for tendering, banking and regulatory clearances.

Failure to act before the deadline can lead to full re-imposition of late fees, continued cancellation of registration, loss of ITC, increased audit and enforcement activity, and potential prosecution in grave cases. For many SMEs, the financial burden of post-deadline liabilities can be crippling.

MSMEs & Small Traders: High benefit due to accumulated late fees and blocked credits.

Service Providers & Freelancers: Can clear procedural lapses without heavy penalties.

Manufacturers & Retailers: Reconcile ITC and clear inventory-related mismatches.

Startups: Restore dormant GST registrations and re-enable compliance certificates necessary for funding and procurement.

Section 128A’s amnesty is a significant, time-bound opportunity to regularise historic GST non-compliances cost-effectively. Taxpayers should treat the 31 March 2025 deadline as an operational priority, mobilise accounting, tax and treasury teams, and use the checklist above to ensure complete and accurate compliance. Timely action will restore legal standing, recover blocked credits, and minimise future dispute risk.