Latest GST Weekly Update 50/2024-25 for 11th to17th March 2025

The Goods and Services Tax (GST) landscape in India is dynamic, with frequent updates that impact businesses and taxpayers. This week, from March 11 to 17, 2025, significant developments have emerged, including a notification from the Andhra Pradesh GST Department, clarifications on an amnesty scheme, and notable court rulings. This report provides a detailed examination of these updates, ensuring stakeholders are well-informed about their implications.

Also Read-Latest GST News, Information, Notifications & Announcements [Period 25/02/25 to 03/03/25]:

Notification from Andhra Pradesh GST Department.

On March 13, 2025, the Andhra Pradesh GST Department issued Notification No. G.O. Ms. No. 94, introducing a scheme to waive interest and penalty for tax payments under Section 128A of the Andhra Pradesh Goods and Services Tax Act, 2017. This initiative, effective from November 1, 2024, aims to provide relief to registered persons by setting specific deadlines for compliance.

The notification categorizes taxpayers into two groups:

• Registered persons with notices or orders under Section 128A: Must pay taxes by March 31, 2025, to avail the waiver.
• Registered persons with notices under Section 74 and subsequent orders: The deadline is six months from the date the order is issued.

Section 128A likely mirrors the central GST Act’s provision for amnesty, allowing waivers for interest or penalty if taxes are paid timely. Section 74, typically for unregistered persons or those with tax shortfalls, seems to apply here in specific cases where registered persons are involved, possibly due to procedural or legal complexities. This dual categorization ensures flexibility but requires taxpayers to understand their specific situation, potentially consulting tax professionals for clarity.

Deadlines for Waiver Scheme.

This table, easily insertable into WordPress, summarizes the deadlines, aiding quick reference for businesses and professionals.

Clarifications on the GST Amnesty Scheme.

The Directorate General of Taxpayer Services (DGTPS) in Bangalore Zone, on February 25, 2025, released a comprehensive FAQ to address ambiguities surrounding the amnesty scheme under Section 128A. This is crucial for taxpayers navigating the scheme, and the following points provide detailed insights:

• Tax Amount Adjusted by Officers: Yes, amounts adjusted by tax officers before the scheme can be considered as tax paid, but interest and penalty recoveries are non-refundable. For example, if an officer adjusted ₹50,000 as tax due, it counts towards the demand, but any interest paid cannot be reclaimed.
• Voluntary Payments Before the Scheme: If taxes were paid voluntarily and the notice only pertains to interest/penalty, the waiver applies. This benefits proactive taxpayers, ensuring they aren’t penalized for early compliance.
• Eligibility for Multiple Tax Periods: Where notices cover multiple periods, some within Section 128A’s scope and others outside, taxpayers can apply for waiver for eligible periods. This is particularly relevant for businesses with long-standing demands spanning several years.
• Eligibility for Multiple Issues: Notices involving various issues, including erroneous refunds, allow waiver applications, but full tax payment is mandatory. For instance, if a notice demands ₹1 lakh for tax and includes a ₹20,000 erroneous refund, the entire tax must be paid to avail the waiver.
• Departmental Appeals: If the department has appealed against an order, the waiver is still possible, subject to paying additional tax within three months of the appellate order. This ensures continuity even in disputed cases.
• Applicability for IGST and Cess: The scheme extends to IGST and compensation cess, requiring full payment of CGST, SGST, IGST, and cess as demanded. This broadens the scheme’s reach, benefiting exporters and manufacturers.
• Demand on Account of Transitional Credit: Cases involving irregularly availed transitional credit are covered, providing relief for businesses transitioning from previous tax regimes.
• Late Fees and Fines Not Covered: The waiver excludes late fees, redemption fines, etc., focusing solely on interest and penalty under specified sections. This limitation is important for taxpayers to note, as additional costs may persist.
• Mode of Payment: Payments can be made by debiting the electronic cash ledger or utilizing Input Tax Credit (ITC) via the electronic credit ledger, or a combination, except for reverse charge or e-commerce operator demands, which must use the cash ledger. This flexibility aids cash flow management.
• Section 16(4) and Other Issues: For demands under Section 16(4), taxpayers need only pay the net amount after deductions as per Section 16(5) or (6), simplifying compliance for certain cases.
• Linking DRC-03 to Demand: Payments via Form GST DRC-03 must be linked to the demand order using Form GST DRC-03A on the common portal, ensuring transparency. For example, if a payment was made earlier, linking it via DRC-03A is essential for waiver eligibility.

These clarifications, referencing the GSTN Advisory for the waiver scheme dated November 8, 2024, ensure taxpayers are equipped to navigate the scheme effectively.

Recent Court Rulings Impacting GST.

This week, two court decisions have significant implications for GST compliance and tax liabilities:

1. Madras High Court Decision (M/s Modern India Products):
   • The Hon’ble Madras High Court of Madurai Bench, in Writ Application (MD) No. 1559 of 2021, allowed an IGST refund claim for exports qualifying as zero-rated supplies, despite the claimant seeking duty drawback. The court relied on the Gujarat High Court’s decision in M/s. Amit Cotton Industries v. Principal Commissioner of Customs, stating that Circular No. 37/2018-Customs cannot override Rule 96 of the CGST Rules. This ruling, following precedents like M/s. Precot Meridian Limited v. The Commissioner of Customs, clarifies that duty drawback and IGST refunds can coexist, benefiting exporters.
2. Gauhati High Court Decision (X’SS Beverage):
   • The Gauhati High Court ruled that fruit pulp and juice-based carbonated drinks attract 12% GST, not 28%, as they are not merely carbonated water. This decision, referencing the Customs Tariff Act, 1975, and judicial precedents like Parle Agro’s ‘Appy Fizz’, emphasizes product classification based on essential character. For X’SS Beverage, a manufacturer of carbonated juice drinks, this ruling nullifies a higher GST demand, potentially setting a precedent for similar products.

Recent Court Decisions.

These rulings, being high court judgments, establish legal precedents, influencing future GST classifications and refund claims.

Implications for Businesses.

The amnesty scheme offers a window for businesses to clear outstanding demands without additional financial burden, but timely action is crucial. The court rulings provide clarity on export refunds and product classifications, potentially reducing tax liabilities. Businesses should review their compliance strategies, especially for exports and beverage manufacturing, and consult tax experts to leverage these developments.

Frequently Asked Questions

1. Can I use input tax credit to pay the tax demanded under the amnesty scheme?
   • Yes, you can pay using ITC through the electronic credit ledger, except in cases where the demand is related to reverse charge or e-commerce operators, where payment must be made from the electronic cash ledger.
2. What if I have already paid the tax before the amnesty scheme was announced?
   • If you’ve already paid the tax and the notice only pertains to interest and/or penalty, you can still avail the waiver for interest or penalty.
3. Does the waiver cover penalties under sections other than those specified?
   • No, the waiver only covers interest or penalty under specific sections mentioned in Section 128A. Other penalties like late fees are not covered.

Conclusion

This week’s GST updates, from the Andhra Pradesh notification to court rulings, highlight the evolving nature of tax compliance in India. Staying informed and proactive will help businesses navigate these changes effectively, ensuring compliance and potential cost savings

C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.