GST Amnesty Scheme in India: Penalty Waiver & Relief Guide

Many businesses in India find GST compliance challenging. They often struggle with missed return filings, pending dues, or high late fees. Penalties and legal notices frequently follow these defaults. As a result, the Amnesty GST Scheme offers relief by allowing taxpayers to clear past dues with reduced penalties and interest.

The GST Amnesty Scheme is a government initiative that gives taxpayers a one-time opportunity to fix past non-compliance. In 2024, the government introduced a key update through Section 128A of the CGST Act. This update expands relief by reducing or waiving penalties and interest in eligible cases. It also encourages voluntary compliance and reduces the financial burden.

This article on the GST amnesty scheme helps business owners, SMEs, startups, and GST defaulters settle pending liabilities and stay fully compliant. 

What is the GST Amnesty Scheme? Latest Update

The GST Amnesty Scheme is a government initiative that helps taxpayers who have defaulted on GST compliance. Under this scheme, businesses and individuals can:

• File pending returns, including GSTR-3B, GSTR-4, and annual returns.
• Pay outstanding dues with reduced or waived penalties, late fees, and interest using forms like DRC-03.

This scheme provides a one-time opportunity for defaulters to regularize their GST compliance. Taxpayers can comply without facing heavy financial consequences.

Objective of the Scheme

The main objectives of the GST Amnesty Scheme are:

• Improve compliance by encouraging voluntary filing of pending returns.
• Reduce litigation by resolving disputes without lengthy legal proceedings.
• Bring defaulters back into the system and ensure transparency and accountability.

Example: A small business misses filing multiple GSTR-3B returns. Penalties and interest can accumulate, sometimes up to 100% of the tax due, making compliance costly. Using the GST Amnesty Scheme, the business can file pending returns and submit DRC-03 for admitted tax. This allows the business to become fully compliant without a heavy financial burden.

Historical Timeline of GST Amnesty Scheme

To understand how the scheme has evolved over the years, here is a chronological timeline highlighting key updates and relief measures in the Amnesty Scheme:

• 2018: The scheme was first notified to cover July 2017 – September 2018. Taxpayers were given a one-time extension to file pending returns by March 31, 2019.
• 2020: The reopening of the scheme was requested by businesses and trade associations due to COVID-19. The government provided temporary relief for several months.
• 2021: On June 1, 2021, the Central Board of Indirect Taxes and Customs (CBIC) implemented the scheme. It covered pending GSTR-3B returns from July 2017 to April 2021.
• 2023: The GST Council recommended relief for taxpayers who had not filed GSTR-4, GSTR-9, and GSTR-10, including provisions for canceled registrations. Section 62 was not invoked if returns were filed by June 30, 2023.
• 2024: Section 128A was introduced to provide a conditional waiver of interest and penalties. Rule 164 became effective on November 1, 2024, through Notification No. 20/2024 – Central Tax. CBIC issued Circular No. 238/32/2024-GST to clarify doubts regarding Section 128A.

The GST Amnesty Scheme continues to provide taxpayers a practical way to regularize pending GST compliance with minimal financial burden.

Latest Updates on GST Amnesty Scheme (2024–2025)

The GST Amnesty Scheme 2024–2025 introduces key updates under Section 128A of the CGST Act. These include conditional waivers of interest and penalties, appeal withdrawals, and streamlined application processing via SPL-01 and SPL-02 forms.

Here’s a detailed timeline of the key updates and clarifications under the GST Amnesty Scheme 2024–2025:

1. June 11, 2025 Update

As of June 8, 2025, a total of 3,02,658 waiver applications have been filed through SPL-01 and SPL-02. Some taxpayers encountered technical issues while filing applications under Section 128A. GSTN has provided resolutions to address these issues (see “Resolution for Issues While Filing GST Amnesty Application” below).

2. May 14, 2025 Update

Withdrawal applications (APL 01W) filed before the final acknowledgment (APL 02) are automatically approved. The appeal status then changes to “Appeal withdrawn.”

For applications filed after APL 02, approval from the Appellate Authority is required. Taxpayers must upload a screenshot showing “Appeal withdrawn” when filing waiver applications under Section 128A. This step is mandatory for processing.

3. March 26, 2025 Update

The GST Amnesty Scheme 2024 was introduced via CGST Notification 21/2024 under Section 128A. The scheme allows a conditional waiver of interest and penalties for tax demands from FY 2017-18 to 2019-20 under Section 73 of CGST. Taxpayers must fully pay their outstanding tax dues by March 31, 2025, to qualify.

4. February 7, 2025 Update

Instruction No. 02/2025-GST clarified that taxpayers who have fully paid their tax remain eligible for the amnesty scheme. This applies even if appeals have been filed solely for interest or penalty calculation errors under Section 128A.

5. January 14, 2025 Update

GST SPL-01 and SPL-02 forms became available on the GST portal. Taxpayers must withdraw appeal applications to become eligible for the waiver.

• APL 01 withdrawal is available for appeals filed before the First Appellate Authority.
• For APL 01 filed before March 21, 2023, withdrawal requests must go through the Appellate Authority, State Nodal Officer, and GSTN.

These updates ensure taxpayers can efficiently claim interest and penalty waivers while complying with Section 128A requirements. Filing through SPL-01 or SPL-02 helps businesses stay compliant and avoid unnecessary penalties.

Key Differences Between the GST Amnesty Scheme 2021 and 2024

To understand how the GST Amnesty Scheme has evolved, it is important to compare the 2021 and 2024 versions. 

The following table highlights the main differences in scope, applicability, and compliance requirements:

Feature	GST Amnesty Scheme 2021	GST Amnesty Scheme 2024
Implementation Date	June 1, 2021	November 1, 2024
Applicable Period	Pending GSTR-3B returns from July 2017 – April 2021	Pending dues and notices for FY 2017-18, 2018-19, 2019-20
Legal Basis	CBIC notification under Section 128A of the CGST Act	Pending GSTR-3B returns from July 2017 to April 2021
Forms for Application	SPL-01 and SPL-02	SPL-01 and SPL-02
Interest & Penalty Waiver	Partial waiver for pending dues; interest and penalties reduced	Conditional waiver of interest and penalties; full or partial relief depending on compliance
Appeals	Withdrawal of pending appeals allowed for eligibility	Mandatory withdrawal of appeals (APL-01) before filing for waiver; screenshots required
Cancelled Registrations	Not explicitly covered	Eligible taxpayers with cancelled registrations can seek revocation while settling dues
Objective Focus	Reduce litigation, encourage filing of pending returns	Streamline compliance, waive interest/penalties, reduce disputes, and regularize past defaults
Deadline for Payment	As notified in 2021 (varied by CBIC circulars)	CBIC notification under Section 73 of the CGST Act

In conclusion, the 2024 scheme offers structured relief and covers cancelled registrations. It also requires appeal withdrawals, helping defaulters regularize GST and reduce financial risks.

Who is Eligible for the GST Amnesty Scheme?

The GST Amnesty Scheme 2024 helps taxpayers who faced compliance challenges in previous years. Eligibility is determined by the type of tax defaults and the financial years for which dues remain unpaid.

Eligible Taxpayers:

• Businesses and individuals who have received notices under Section 73 of the CGST Act for FY 2017-18, 2018-19, and 2019-20.
• Taxpayers with pending GSTR-3B, GSTR-4, GSTR-9, or GSTR-10 returns.
• Those who have not fully paid interest or penalties on outstanding GST dues.
• Taxpayers whose GST registrations were cancelled can still apply if eligible for revocation under the scheme.
• Individuals or businesses with cases under appeal, provided they meet the conditions to withdraw or regularize appeals.

This scheme cannot be availed by taxpayers who have already paid all interest and penalties or do not meet the timelines specified under Section 128A.

In short, the GST Amnesty Scheme 2024 targets defaulters who want to settle pending dues and avoid further litigation.

How to Apply for the GST Amnesty Scheme? (Step-by-Step)

Applying for the GST Amnesty Scheme is straightforward if you follow the steps carefully. This step-by-step guide helps taxpayers avail benefits under Section 128A:

1. Check Eligibility

• Ensure your pending GST dues, returns, or notices fall under the scheme.
• If you have appeals, verify that they are withdrawn or in a status eligible for waiver.

2. Gather Required Documents

• Details of outstanding tax, interest, and penalty dues.
• Acknowledgment of pending returns (GSTR-3B, GSTR-4, GSTR-9, or GSTR-10).
• Screenshot of “Appeal withdrawn” if applicable (for taxpayers with pending appeals).

3. Access GST Portal Forms

• Log in to the GST portal using your credentials.
• Navigate to Forms GST SPL-01 and SPL-02, which are specifically for amnesty applications.

4. Fill and Submit Application

• Complete the form with accurate taxpayer details, period of default, and outstanding dues.
• Upload supporting documents, including appeal withdrawal proof, if required.
• Submit the application online before the scheme’s deadline.

5. Make Payment (if applicable)

• Pay outstanding tax dues after adjustment of waived penalties and interest.
• Keep the payment receipt for records and future reference.

6. Confirmation and Acknowledgment

• The GST portal generates an acknowledgment after submission.
• Track your application status to ensure authorities approve and process it correctly.

Submit your GST Amnesty Scheme application by 31st March 2025 to avail interest and penalty waivers under Section 128A.

How to Fix Errors While Filing GST Amnesty Applications?

Taxpayers sometimes face technical glitches when submitting GST amnesty applications. Following the GSTN advisory issued on 11th June 2025 ensures smooth filing and allows claiming the interest waiver:

1. Demand Order Field: In SPL-01, select ‘No’ for “Whether the demand order is issued through the GST portal” to avoid errors.

2. Entering Order Number: Enter the online order number with the prefix ‘ONL’. 

Example: ABCDE12345X1Z2 becomes ONLABCDE12345X1Z2. Missing the prefix will treat it as a manual filing.

3. Basic Details: Select your mobile number and email ID. Fill in any other editable fields manually to ensure correct records.

4. Order and Payment Details: Manually enter all order, payment, and demand-related information to avoid rejection.

5. Payment Scenarios: Enter payment details in the Payment Against Demand Section of the DRC-03 form.

Important: You cannot upload payment proofs here. Upload payment receipts or challans separately in the GST portal to ensure successful submission.

By following these steps carefully, taxpayers can successfully submit their GST amnesty applications. This allows them to avail the benefits, including the interest waiver in GST for eligible dues.

Benefits of the GST Amnesty Scheme 2024-25 in India

The GST Amnesty Scheme 2024–25 offers several advantages for taxpayers looking to regularize past non-compliance. 

Key Benefits:

• Waiver of Penalties and Interest: Eligible taxpayers receive partial or full relief on penalties and interest for their pending GST dues.
• Reduced Litigation: The scheme minimizes disputes with tax authorities. It helps taxpayers avoid prolonged legal proceedings.
• Simplified Compliance: Taxpayers can settle past defaults in a structured and transparent manner.
• Eligibility for Cancelled Registrations: Taxpayers with cancelled GST registrations can revoke them while settling dues.
• Encourages Voluntary Compliance: The scheme motivates businesses to file pending returns and clear dues without fear of heavy fines.
• Clear Record of Compliance: When taxpayers file under the scheme, it updates their GST records. This makes future transactions and filings smoother.

Late Fee Concessions and Penalty Waiver in GST

The GST Amnesty Scheme provides taxpayers with a penalty waiver in GST and a reduction in late fees for delayed GSTR-3B filings. By capping the maximum late fee, the scheme offers relief and encourages overdue return filing.

Key Provisions:

• GSTR-3B with Tax Liability: Maximum late fee is ₹1,000 per return (₹500 under CGST + ₹500 under SGST).
• Nil GSTR-3B Returns: Maximum late fee is ₹500 per return (₹250 under CGST + ₹250 under SGST).

The scheme ensures that taxpayers pay only the lower of the actual late fee calculated under the Act or the capped maximum fee. This approach simplifies compliance and reduces the financial burden. 

Example: Suppose ABC Traders missed filing the GSTR-3B for March 2021, originally due on 20th April 2021, and decided to file it on 15th September 2021. Under standard provisions, the late fee would have been ₹6,500 for the delay. However, under the amnesty scheme, the late fee is capped at ₹1,000. So, ABC Traders will pay ₹1,000 as a late fee, along with the applicable tax liability and interest.

Key Challenges Under the GST Amnesty Scheme

The GST Amnesty Scheme helps non-filers regularize pending GST compliance. However, taxpayers may face several hurdles that limit the scheme’s effectiveness.

1. No Waiver on Interest Dues: Taxpayers with pending GSTR‑3B returns and outstanding tax are ineligible for an interest waiver. The scheme relaxes the maximum late fee only if the return is filed by 31st August 2021.

2. Restrictions on ITC: A major concern raised by tax professionals is the non-admissibility of ITC under the scheme. The amnesty allows taxpayers to pay pending taxes for previous periods. However, it does not extend the time to claim Input Tax Credit (ITC) for those periods.

The CGST Act sets the ITC claim deadline as the earlier of the GSTR‑3B due date for September of the following year or the annual return filing deadline.

Example: For GSTR‑3B due on 15th October 2021 and the GSTR-9 annual return due on 31st December 2021, the Amnesty Scheme reduced late fees for GSTR‑3B but did not extend the ITC claim period, which ended on 15th October 2021. Taxpayers cannot report ITC for these periods under the scheme.

3. No Relief for Late Filing of GSTR-1: The amnesty scheme covers only GSTR-3B returns. Taxpayers who file pending GSTR-1 and GSTR-3B returns for the same period do not receive any waiver or relief for the GSTR-1 filing.

4. Revocation of Cancelled GST Registration: Pending GSTR‑3B returns require an active GSTIN. The CBIC, via Notification No. 34/2021 on 29th August 2021, extended the revocation window to 30th September 2021 for GSTINs canceled between 1st March 2020 and 31st August 2021 due to non-filing, under Section 29(2) Clauses (b) and (c) of the CGST Act.

Before this notification, there was no clarity on how taxpayers could restore GSTINs already canceled. This was especially unclear for taxpayers who had filed appeals.

With the GST Amnesty Scheme, you can file GST returns effortlessly, avoid missed deadlines, and stay fully compliant. Late fees and taxes are calculated automatically, and even nil returns are quick to submit. For expert help, contact RegisterKaro today.

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