Request for Waiver Interest and Penalty under Section 128A of CGST Act, 2017

Request for Waiver Interest and Penalty under Section 128A of CGST Act, 2017 

Date: 

To, The Concerned Officer, 

[Office Address] City, State 

Subject: Request for Waiver of Interest and Penalty Under Section 128A of the CGST Act, 2017 

Dear Sir/Madam, I hope this letter finds you well. I am writing to respectfully request the waiver of interest and penalty in accordance with Section 128A of the Central Goods and Services Tax (CGST) Act, 2017. We refer to the order issued to us in relation to the tax demand, which includes significant interest and penalty for the periods covering [Financial Year(s)]. Below, I provide the necessary details and justifications for my request. Reference to the Order/Notice: We refer to the order/notice number [Insert Order/Notice Number] dated [Insert Date], which levies interest and penalty under the provisions of Section 73 of the CGST Act for the non-payment or delayed payment of tax liabilities for the financial years [Year(s)]. We acknowledge that some dues were delayed; however, we have taken steps to resolve these issues and are committed to fulfilling our obligations under the law. Request for Waiver under Section 128A: As you are aware, Section 128A of the CGST Act, 2017, which was introduced through Section 146 of the Finance (No. 2) Act, 2024, provides a provision for the waiver of interest and penalty for registered persons who clear their outstanding tax liabilities related to the financial years 2017-18, 2018-19, and 2019-20. This newly inserted section allows taxpayers to avail themselves of significant relief by paying only the tax dues without any additional burden of interest or penalties, provided that the tax is cleared within the prescribed time frame. In this context, I humbly submit that I am eligible for the relief provided under Section 128A, and I intend to avail the benefit for the period specified in the order. Justifications for Waiver: 1. Eligibility under Section 128A: The GST Council, in its recent meetings, recommended that registered taxpayers like us, who have outstanding dues for the financial years 2017-18, 2018-19, and 2019-20, may be allowed to settle their dues without incurring any interest or penalty. We believe that our case qualifies under this recommendation, and we wish to clear our outstanding liabilities as per the provisions of this section. 2. GST Council Recommendations and Timeline: The GST Council has recommended that taxpayers be permitted to make the required payments on or before 31st March 2025, as prescribed by Section 128A. We are currently arranging funds and plan to make payments in tranches as per the relief provisions, ensuring full clearance by the prescribed deadline to take full advantage of the waiver scheme. Further, the GST Council has recommended the issuance of a circular to clarify various issues surrounding the waiver of interest and penalty. This will provide much-needed clarity on the procedural aspects, ensuring that we fully comply with the requirements set forth. 3. Clarity on Rule 164 of CGST Rules, 2017: The GST Council has also proposed the insertion of Rule 164 into the CGST Rules, 2017. This rule will outline the specific procedures for availing the waiver and ensure uniform implementation across the country. We are closely following the developments and expect further guidance through circulars that will provide a clear roadmap for availing the waiver. Until such time, we request that no recovery proceedings be initiated. 4. Impact of Waiver on Our Business: The imposition of interest and penalties for delayed tax payments has placed a significant financial strain on our business. While we acknowledge our responsibility to comply with tax laws, the current economic challenges have made it difficult for us to meet these obligations without facing severe hardship. The relief provided by Section 128A offers a much-needed respite, allowing us to focus on the core operations of our business while settling our tax liabilities in a timely manner. The waiver of interest and penalties will enable us to maintain financial stability, ensuring that we can continue contributing to the GST system without further defaults. 5. Assurance of Compliance: We further assure you that we will continue to maintain compliance with GST filings and payments to avoid any such situations in the future. Request for Deferment of Recovery Proceedings: In light of the above, I humbly request that the recovery proceedings initiated under the provisions of Section 73 of the CGST Act be kept in abeyance until the provisions of Section 128A are fully operational. As the section is scheduled to come into effect on 1st November 2024, I respectfully submit that no coercive actions, such as the attachment of bank accounts or seizure of assets, be initiated against us until the full benefits of the waiver scheme can be availed. We are committed to clearing our outstanding dues under the framework provided by Section 128A. Once the procedural details are clarified and the relevant rules and forms are introduced, we will immediately proceed with the necessary steps to settle our liabilities. Application for a waiver of interest and penalty under Section 128A of the CGST Act, 2017: In conclusion, we request your kind consideration of our application for a waiver of interest and penalty under Section 128A of the CGST Act, 2017. We are fully committed to complying with the tax laws and will take all necessary actions to clear our dues within the specified timeframe. Your cooperation in deferring the recovery proceedings until the waiver provisions are fully operational would be greatly appreciated. We kindly request your assistance in expediting the process for waiver consideration, allowing us to resolve this matter promptly and focus on regular business operations. We look forward to your favourable response and are available to provide any additional information or clarification that may be required. Thank you for your attention to this matter. Yours sincerely, Your Name Designation Business Name GSTIN Contact Information.

Adv KL Gupta