GST Amnesty Scheme 2025-26 - Section 128A, Eligibility, and How to Apply

Everyone liable to pay or file their GST returns must do so by complying with all rules and deadlines. In the case of GST, one must file it in a sequential manner. If the deadline for the same passes, then a taxpayer may have to pay penalties for missing their filings. Moreover, a long gap in GST filing may also result in the GST registration getting cancelled. To provide relief from such consequences, the government gives the benefit of the GST Amnesty Scheme, which allows taxpayers to file their pending GST returns without hefty penalties.

Note: The government has periodically launched different types of amnesty programs. Some of these programs aim to reduce penalties for late filing (see the sections that have been kept below), and more recently, a program under Section 128A of the CGST Act aims to reduce interest and penalties on old tax demands. The scheme that is currently in effect has been added to the beginning of this article.

Section 128A was added by the Finance Act 2024. It helps businesses that still have unresolved GST demand notices or orders from FY 2017–18, 2018–19, or 2019–20, as long as the demands were made under Section 73 of the CGST Act and not Section 74.

• Who it's for: professionals, traders, and businesses that have a Section 73 demand notice or order for one of those three financial years.
• What's on offer: pay the full principal tax demand, and the interest and penalty components are waived in their entirety.
• Why it doesn't work: This plan isn't for people who want to dispute or contest the demand; it's for people who agree with the demand and just want to avoid the interest and penalty that come with it.
• No minimum or maximum amount of outstanding demands is needed to be eligible. Businesses with both small and large amounts of outstanding demands can apply.
• Applications are filed through the GST portal, under Services > User Services > My Applications > File Amnesty Application. Given that the scheme's window has moved in the past, it's worth double-checking the current deadline directly on gst.gov.in before applying.

Whether you qualify for this amnesty hinges entirely on which section your demand was raised under:

• Section 73 covers claims that come from honest mistakes, like misclassification, short payment, or wrongly claiming an input tax credit, as long as there are no signs of fraud. People in these situations can get amnesty.
• Section 74, by contrast, applies where the department alleges fraud, wilful misstatement, or suppression of facts. Demands under this section are excluded from the amnesty altogether.

The first thing you should do is look at your demand order. It will say which section it does belong to. If it turns out to be a Section 74 case, there is no way to get amnesty. The only way to move forward is to fight it in the normal way.

Some of the more common Section 73 scenarios include mismatches between GSTR-1 and GSTR-3B filings, ITC claimed in excess of what's due, or simply an incorrect tax rate having been applied.

Also Read: Advantages of Goods and Services Tax (GST)

• Start by reviewing every pending demand order sitting against your GSTIN, under Services > User Services > View Notices and Orders on the GST portal.
• Pick out the ones relating to FY 2017-18, 2018-19, or 2019-20 that were raised under Section 73.
• Figure out the total amount of tax that needs to be paid, but only the principal tax. Do not include the interest or penalty.
• Use a DRC-03 voluntary payment challan on the portal to pay that tax amount first.
• Only after payment, file the amnesty application in the prescribed form within the scheme's window (check the latest GST circular for the exact form reference in use).
• The tax authorities will then verify the payment and issue an order formally withdrawing the interest and penalty.

One important sequencing point: the tax has to be paid before the amnesty application is filed. An application submitted without the underlying tax payment already made will simply be rejected.

The 2024 plan isn't the first time the government has tried to fix old GST problems; a pretty regular pattern of amnesty relief is being given every couple of years:

• A 2020 waiver reduced late fees for GSTR-3B returns covering March to June of that year, provided they were filed by September 2020.
• A 2021 scheme extended reduced late fees to GSTR-1 and GSTR-3B returns spanning February 2020 through July 2021.
• Between 2021 and 2022, a further amnesty reduced late fees for GSTR-9 and GSTR-9C annual/composition returns covering FY 2017-18 through 2019-20.
• A 2023 measure went further for small taxpayers, setting the late fee to nil for those with turnover below ₹2 crore who hadn't filed GSTR-9.

Taken together, these show the government tends to open a fresh amnesty window roughly every two to three years, mainly to clear out older pending periods and reduce litigation. The practical takeaway: businesses sitting on notices shouldn't wait too long to act, since these windows have historically been time-limited.

Also Read: How Does GST Work in India?

It depends on whether you agree with what is being asked for if amnesty is the best way to meet that need:

• If you really think the demand is wrong, you can file an appeal with the GST Appellate Authority. You have to do this within three months of receiving the demand order. Be aware that a 10% pre-deposit of the disputed tax is mandatory just to get the appeal admitted.
• If the demand seems fair or isn't worth fighting, amnesty is usually the faster and cleaner choice. Just pay the tax, and the interest and penalties will go away.
• For very large or legally complex demands, it may be worth exploring a reconciliation approach or direct negotiation rather than defaulting to either option.

There are real costs to appeal, like legal fees, the pre-deposit, and time. However, if the appeal is successful, the tax liability is erased completely. Losing, on the other hand, leaves you owing the full tax, interest, penalty, and whatever costs the appeal itself incurred. Most of the time, amnesty works for small demands, filings that are obviously wrong, or companies that would rather settle old disputes than fight them.

A good part of avoiding demand notices altogether comes down to staying on schedule:

• GSTR-1 is due on the 11th of the following month for monthly filers, or the 13th of the month after the quarter for those on the QRMP scheme.
• GSTR-3B is due on the 20th of the following month for monthly filers, with quarterly filers following a 22nd or 24th deadline depending on their state.
• The GSTR-9 annual return is due by 31st December following the end of the financial year.
• It's worth reconciling input tax credit against GSTR-2B every single month before claiming it in GSTR-3B, and responding to any GST notice within 30 days of receiving it.
• GST law requires invoices, e-way bills, and purchase records to be retained for a minimum of six years.

Before assuming you're in the clear, it's worth actively checking your GST portal account:

• Go to Services > User Services > View Additional Notices and Orders — this shows every demand order, notice, and ongoing proceeding tied to your GSTIN.
• Also check Services > My Applications > Show Cause Notices for anything separately flagged there.
• Download copies of any demand orders you find, and if the amount involved is above roughly ₹5 lakh, it's worth bringing in a CA or GST practitioner before deciding how to proceed.

Businesses, especially smaller ones, have been affected heavily because of the Covid-19 pandemic. To have to pay heavy penalties on account of late GST filings could have been very difficult for them. Hence, the GST Amnesty scheme is a welcome relief for such businesses since they can clear their previously pending filings without the burden of high penalties.

For anyone currently dealing with a live GST demand from FY 2017-18 to 2019-20, the more directly relevant option today is the Section 128A scheme detailed at the top of this article, rather than the 2022 late-filing relief described above.

Also Read: GST Rates in India 2025