Dated 27th March, 2025
Issued by: Ministry of Finance (Department of Revenue), CBIC
The Central Government, exercising its powers under Section 164 of the CGST Act, 2017, and acting upon the recommendations of the GST Council, has promulgated the Central Goods and Services Tax (Second Amendment) Rules, 2025, through Notification No. 11/2025–Central Tax. These amendments primarily target Rule 164 of the CGST Rules, 2017, and are aimed at aligning procedural provisions relating to Section 128A of the CGST Act, which deals with waiver of demands in special cases.
Key Amendments:
- Amendment to Rule 164(4): Clarity on Tax Period Eligibility for Refunds
The phrase “related to period mentioned in the said sub-section” has been inserted after the expression “after payment of the full amount of tax” in sub-rule (4) of Rule 164.
Implication:
This clarifies that the benefit of withdrawal of appeal and refund under Section 128A is confined strictly to the specified period, i.e., 1st July 2017 to 31st March 2020, and not beyond. Refunds will only be considered for taxes paid pertaining to this defined period, ensuring that taxpayers do not claim undue benefits for overlapping or non-specified timeframes.
- Insertion of Explanation After Rule 164(4): Restriction on Refunds for Fully Paid Demands
A new Explanation is introduced clarifying that no refund shall be available in cases where:
- Tax, interest, and penalty have already been discharged for the entire period, and
- A notice/statement/order under Section 128A(1) contains demands partly for the specified period and partly for any other period.
Implication:
This provision aims to prevent double benefit or unintended refunds in scenarios where the demand spans multiple periods. Taxpayers who have already discharged the demand in full prior to the notification’s enforcement will not be entitled to claim refunds merely due to partial overlap with the Section 128A period.
- Insertion of Second Proviso to Rule 164(7): Partial Withdrawal of Appeals Allowed
A second proviso has been added under sub-rule (7) allowing a taxpayer to partially withdraw an appeal. Specifically, if a demand notice or order includes taxes for both the Section 128A period (1 July 2017 to 31 March 2020) and other periods, the appellant:
- May intimate the appellate authority or tribunal that they do not wish to pursue the appeal only for the 128A period, and
- The authority shall act only in respect of the remaining period and pass such orders as deemed just and proper.
An accompanying Explanation deems such appeal applications to be withdrawn to the extent of the said intimation for the purpose of Section 128A(3).
Implication:
This insertion facilitates administrative efficiency and legal clarity, allowing appeals to continue partially without requiring a full withdrawal, thereby protecting taxpayer rights while maintaining the integrity of the scheme under Section 128A.
Conclusion:
The Second Amendment Rules, 2025, provide procedural refinement and targeted clarifications concerning the appellate and refund framework under Section 128A. By introducing restrictions and clear demarcations on eligible periods, refund entitlements, and appeal withdrawals, the Government seeks to ensure fair application, avoidance of duplication, and efficient processing of cases falling under the tax amnesty or waiver mechanism.