Instruction issued by the CBIC providing procedure to be followed in department appeal

The Central Board of Indirect taxes (CBIC) has issued an Instruction No. 02/2025-GST, which aims to
simplify the GST compliance process by providing clarity on the handling of appeals related to interest
and/or penalty under Section 128A of the CGST Act.

The instruction clarifies that in cases where the tax amount has been fully paid by the taxpayer on
demands made under section 73 of the CGST Act and the department is in appeal or under the process
of filing an appeal only on account of wrong interest calculation and/or wrong imposition or non
imposition of penalty amount, the taxpayer can apply for waiver scheme u/s 128A also.

Section 128A was inserted to provide relief to the taxpayers by waiving off interest or penalty (or both)
under specific conditions for demands raised under Section 73 (tax recovery) for the financial years
2017-18, 2018-19, and 2019-20. This provision was introduced to ease taxpayer compliance by
reducing the financial burden of interest and penalties.