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New GST Appeal Amnesty Scheme Notification: What it Means for Taxpayers

In a move aimed at providing much-needed relief to taxpayers, the Central Board of Indirect Taxes and Customs (CBIC) has introduced the GST Appeal Amnesty Scheme. This initiative is designed to address specific situations where taxpayers were unable to file appeals against demand orders within the stipulated time frame. This scheme has been eagerly awaited by taxpayers across the country, and it promises to streamline the appeal process while alleviating the burden of penalties. This amnesty scheme is only stipulated to appeals involving tax. APPEAL AS A RIGHT Typically, the concept of appeals is rooted in the oversight of lower-level decision-makers by higher authorities, aiming to uphold values such as fairness, consistency, and accuracy. These systems are traditionally perceived as operating within a hierarchical structure, where appeals serve as a tool for higher-level bodies to rectify decisions made by, and generally manage, those at a lower level. However, the requirement for any appeal system to maintain an effective system of justice shifts the focus away from hierarchical control and towards addressing issues related to the deference shown by superior bodies towards their counterparts at the lower levels. SCHEME’S APPLICABILITY The scheme is applicable for 2 classes of persons: Taxable persons have not filed even the first appeal due to expiry of the limitation period as stated under Section 107 of the CGST Act. The amnesty scheme is designed to provide assistance to taxpayers whose appeals against orders issued by the Proper officer before 31st March 2023 were dismissed solely because they were unable to file their appeals within the prescribed time frame. The scheme is applicable to the appeals against orders passed by the proper officer under Section 73 and 74 of the Central Goods and Services Tax Act (CGST Act), 2017. Section 73 of the CGST Act is dedicated to the assessment of taxes that remain unpaid or have been underpaid by a taxpayer. It serves as a structured framework for tax officers to commence an investigation in cases where they suspect that a registered individual has failed to remit the full tax amount or has made insufficient payments. Section 74 of the CGST Act addresses the identification of tax that a taxpayer has not paid or has underpaid due to fraudulent activities. In contrast to Section 73, which covers instances of general non-payment or underpayment, Section 74 is exclusively designed to handle cases involving deliberate deceit and fraudulent practices. The scheme is applicable for orders issued by the proper officer until the 31st of March 2023. It does not apply to orders passed on or after the 1st of April 2023. Any taxpayers whose appeal was not filed and appeals not LAST DATE AND FORM FOR FILING APPEAL UNDER THE SCHEME The taxpayer is empowered to submit an appeal against an order issued under Sections 73 and 74 of the GST Act by using FORM GST APL-01, in alignment with the provisions of subsection (1) of Section 107 of the CGST Act. This subsection grants the taxpayer the authority to initiate an appeal against the disputed order, directed towards the appellate authority. As the appeal is filed through Form GST APL-01, it could be considered as a fresh appeal. Section 107 (1) of the GST Act states that “Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.” According to the notification, the same shall be filed before 31st January 2024. CONDITIONS FOR FILING APPEALS AMNESTY SCHEME No appeal shall be filed under this notification unless the appellant has paid: in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and a sum equal to twelve and a half percent of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed, out of which at least twenty percent should have been paid by debiting from the Electronic Cash Ledger. REFUND Regarding the refund, the notification has clearly stated that no refunds shall be issued until the disposal of the appeals. The words of notification says as follows: “No refund shall be granted on account of this notification till the disposal of the appeal, in respect of any amount paid by the appellant, either on their own or on the directions of any authority (or) court, in excess of the amount specified in para 3 of this notification before the issuance of this notification, for filing an appeal under subsection (1) of Section 107 of the said Act.” BENEFITS FOR TAXPAYER This scheme will benefit the taxpayers who have valid grounds for their case but were unable to file their appeals within the stipulated deadline. Also, this will be advantageous for taxpayers whose appeals were dismissed due to delays in submission and who now need to file their appeals before the Second Appellate Tribunal (GSTAT), which has not yet commenced its operations. These taxpayers have the option to initiate fresh appeals through the amnesty scheme. Taxpayers are required to make a pre-deposit of 12.5% instead of the usual 10% of the disputed tax amount to take advantage of this scheme. Nonetheless, this presents an opportunity for taxpayers to pursue their quest for justice. Recently, the Kerala High Court dismissed the writ petition on the ground of availment of benefit of Amnesty Scheme likely to be notified by GST Council.

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