The Section 128A Waiver, and Appeals Withdrawn Under It

Between November 2024 and June 2025, businesses holding old demands under section 73 had to decide whether to keep fighting or to settle. The demands covered GST’s first three years. Settling meant paying the whole of the tax demanded by 31 March 2025, and then filing an application within three more months. In return, the interest and penalty were waived and the proceedings closed. Any appeal or writ against the demand had to be withdrawn first. If the waiver was then refused, the business needed to know whether its appeal came back.

The general window has closed. The scheme still matters for three reasons. Waiver orders can still become void. Withdrawn appeals can be restored or lost. And the High Courts are deciding disputes about late and rejected applications. A narrow track also remains open for redetermined section 74 cases. This guide sets out the scheme as it operated, under section 128A, rule 164, Notification No. 21/2024-Central Tax, and Circulars No. 238/32/2024-GST and 248/05/2025-GST. The demand procedure itself is in Notices: DRC-01A, DRC-01, Sections 73, 74 and 74A.

Where the scheme stands now

Section 128A was inserted by section 146 of the Finance (No. 2) Act, 2024, from 1 November 2024. Notification No. 21/2024-Central Tax, effective the same day, fixed two dates for payment of the tax:

• 31 March 2025, for anyone issued a notice, statement or order within section 128A(1)(a), (b) or ©
• for a section 74 notice redetermined under section 73 on the direction of an appellate authority, Tribunal or court, the date “ending on completion of six months from the date of issuance of the order by the proper officer redetermining tax”

Under rule 164(6), the application was due “within a period of three months from the date notified”. For the first class, that meant by 30 June 2025. Circular No. 238/32/2024-GST para 3.1.5 says the same. For the redetermination class, the proviso allows six months “from the date of communication of the order of the proper officer redetermining such tax under section 73”. No notification extending either date appears in CBIC’s list of Central Tax notifications, checked on 14 October 2026. That list ends with Notification No. 02/2026-Central Tax of 7 May 2026.

The general scheme is therefore closed. The redetermination track remains open in principle wherever an appellate authority, the Tribunal or a court directs that a section 74 notice for 2017-18 to 2019-20 be redetermined under section 73. The six months run from each such order.

Who qualified

Section 128A(1) covered tax payable under three kinds of document, each “pertaining to the period from 1st July, 2017 to 31st March, 2020, or a part thereof”:

• (a) a notice under section 73(1) or a statement under section 73(3), where no order under section 73(9) had been issued
• (b) an order under section 73(9), where no appellate order under section 107(11) or revisional order under section 108(1) had been passed
• © an order under section 107(11) or 108(1), where the Tribunal had not passed an order under section 113(1)

The first proviso brought in section 74 notices where the order “is passed or required to be passed” under section 73 on the direction of an appellate authority, the Tribunal or a court under section 75(2).

The circulars and the rule settled the edges:

• IGST and compensation cess were covered. “Full payment of tax” meant CGST, SGST, IGST and cess together (Circular 238, table item 10).
• Erroneous refunds were excluded by section 128A(2). Where a notice combined a refund demand with other issues, the whole tax, including the refund element, had to be paid before applying. The waiver then applied only to the other issues (rule 164(3); Circular 238, item 7).
• Penalties under sections 73, 122, 125 and others, demanded in the section 73 notice or order, were covered. Late fee and redemption fine were not (item 12).
• Transitional credit availed within the period and demanded under section 73 was covered (item 11).
• IGST on imports, demanded under the Customs Act, was not (item 14).
• Interest on late returns. Circular 238, item 4, excluded interest “demanded on account of delayed filing of returns”, treating it as interest on self-assessed tax recoverable under section 75(12). The Madras High Court has since rejected that exclusion, as discussed below.

The conditions

Full tax, not part. Section 128A(1) requires that the person “pays the full amount of tax payable as per the notice or statement or the order”. Paying the tax on some issues and litigating the rest did not qualify (Circular 238, item 5).

Less what section 16(5) and (6) had already cured. Under rule 164(5), the amount payable excluded tax “not payable in accordance with sub-section (5) or sub-section (6) of section 16”. Those subsections retrospectively relaxed the time limit in section 16(4). Circular 238 paras 3.2.4 and 3.2.5 confined the deduction to credit denied “solely on account of contravention of Section 16(4)”. The portal’s SPL-02 form has a separate table, 3B, for this amount. The background is in Time Limits for Claiming Credit.

Mixed periods. Some notices also covered years after March 2020. As first made, rule 164(4) required the full tax for the whole notice. Notification No. 11/2025-Central Tax of 27 March 2025, four days before the payment date, amended it. From then on, only the tax “related to period mentioned in the said sub-section” had to be paid. An Explanation added that no refund is available of tax, interest and penalty already paid for the entire period before that amendment.

How payment was made.

• Against a notice or statement: through DRC-03 (rule 164(1)).
• Against an order: “only by crediting the amount in the electronic liability register against the debit entry created by the said order” (rule 164(2)).
• Where tax against an order had already been paid by DRC-03, the payment had to be linked to the demand through FORM GST DRC-03A under rule 142(2B), before SPL-02 was filed. The date of the DRC-03, not of the DRC-03A, counted as the date of payment (Circular 238 para 3.2.2).
• Tax paid through GSTR-3B before 1 November 2024 also qualified, subject to verification (Circular 248 paras 4.1.4 and 4.1.5).
• The electronic credit ledger could be used, except for reverse charge tax, tax payable by an e-commerce operator under section 9(5), and erroneous refunds paid in cash (Circular 238, item 13).

Nothing comes back. The third proviso provides that where interest and penalty “has already been paid, no refund of the same shall be available”. Circular 238, item 3, adds that such amounts cannot be adjusted against the tax.

The forms

Form	Filed by	Purpose
SPL-01	Taxpayer	Application where a notice or statement under section 73 has not been adjudicated (clause (a))
SPL-02	Taxpayer	Application where an order has been passed (clauses (b) and ©, and the first proviso)
SPL-03	Proper officer	Notice proposing rejection, within three months of the application
SPL-04	Taxpayer	Reply to SPL-03, within one month
SPL-05	Proper officer	Order accepting the application and concluding proceedings
SPL-06	Appellate authority	Order accepting the application on appeal against a rejection
SPL-07	Proper officer	Order rejecting the application
SPL-08	Taxpayer	Undertaking not to appeal further, needed to restore a withdrawn appeal

A separate application was needed for each notice, statement or order (Circular 238 para 3.1.7). SPL-01 went to the officer competent to adjudicate under section 73. SPL-02 went to the officer competent to recover under section 79 (rule 164, Explanation).

On the portal, GSTN’s advisory of 29 December 2024 reported SPL-02 as live, with SPL-01 to follow. Its help document on filing SPL-02 describes the following steps:

1. The applicant goes to Services > User Services > My Applications and selects “Apply for Waiver Scheme under Section 128A”.
2. A questionnaire asks whether the order was issued on the portal, and whether any appeal was filed and withdrawn. It also asks whether the order involves section 73 or 74 or section 75, and whether it involves an erroneous refund.
3. The applicant completes the order details, the amount demanded and the section 16(4) amount in table 3B. Payments against the demand fill in automatically once mapped through DRC-03A.
4. The applicant uploads up to five documents of 5 MB each, then completes the declaration and verification, and files.

How applications were decided

Rule 164(8) to (14) set a timetable on both sides.

• If the officer proposed rejection, SPL-03 had to issue within three months of the application, with an opportunity of hearing. The reply in SPL-04 was due within a month.
• Where no SPL-03 issued, the order was due within three months of the application. Where one issued, it was due within three months of the reply, or four months of the notice if no reply came (rule 164(13)).
• If no order issued in time, “the application … shall be deemed to be approved and the proceedings shall be deemed to be concluded” (rule 164(14)). Time spent awaiting a withdrawal order was excluded.
• On acceptance of an SPL-01, no DRC-07 issues. On acceptance of an SPL-02, the liability in Part II of the electronic liability register is modified (rule 164(11)).

A waiver can still fall away. Two later events make an SPL-05 or SPL-06 void:

• Under the second proviso to section 128A(1) and rule 164(16), where the department’s own appeal or a revision against the order later enhances the tax, the additional tax must be paid within three months of that order.
• Under rule 164(17), interest or penalty on parts outside the waiver must be paid within three months of the waiver order. That means erroneous refund issues, or periods after March 2020, as listed in columns 19 and 20 of the form.

Withdrawing the appeal, and what followed

Withdrawal was a condition. Section 128A(3) provides that the waiver does not apply where “an appeal or writ petition filed by the said person is pending … and has not been withdrawn by the said person on or before the date notified”. Rule 164(7) required the application to carry evidence of withdrawal. Where the authority had not yet passed a withdrawal order, a copy of the withdrawal application was enough. The order itself was then to be uploaded within a month of its issue. Circular 238, item 9, extended the requirement to special leave petitions in the Supreme Court.

A first appeal is withdrawn under rule 109C by FORM GST APL-01/03W. It must be made before any show cause notice or order under section 107(11). Before the final acknowledgement in APL-02, withdrawal is the appellant’s choice. After it, withdrawal needs the appellate authority’s approval, to be decided within seven days.

Mixed-period appeals. Where an appeal covered years both inside and outside the scheme, withdrawing it entirely would have abandoned the later years. Notification No. 11/2025 added a second proviso to rule 164(7). The applicant instead intimates the appellate authority or Tribunal that it “does not wish to pursue the appeal” for 2017-18 to 2019-20. The appeal continues for the other period, and is “deemed to have been withdrawn” only to the extent of the intimation. Circular 248 para 4.2 explains the change and withdraws the contrary clarification at item 6 of Circular 238.

After acceptance, no appeal. Section 128A(4) provides that once the amount is paid and the proceedings are deemed concluded, “no appeal under sub-section (1) of section 107 or sub-section (1) of section 112 shall lie” against the order. Circular 238 para 3.4.1 adds that no appeal lies against an SPL-05.

After rejection, two routes.

• An SPL-07 is appealable under section 107 in APL-01, but only on whether the waiver applies, “and not on the merits of the original notice” (Circular 238 para 3.4.2). Pre-deposit is normally already covered by the tax paid. Only any shortfall below the section 107(6) amount must be paid (para 3.4.1). The appeal procedure is in Filing a First Appeal: APL-01.
• If no appeal is filed against the SPL-07 within the section 107(1) period, the original appeal “shall be restored” (rule 164(15)(a)).
• If the appellate authority upholds the rejection in APL-04, the original appeal is restored only if the applicant files an undertaking in SPL-08. That must be done within three months of the APL-04, and states that it has neither filed nor intends to file an appeal against that order (rule 164(15)(b)(ii)). The choice is between restoring the merits appeal and pursuing the waiver further. Both cannot be done.
• If the appellate authority holds the rejection wrong, it issues SPL-06, and no appeal lies against that.

The courts since: late applications and self-assessed tax

Late applications. In M/s Sri Laxmi Borewell Agencies v Assistant Commissioner of Central Tax (Karnataka High Court, Dharwad Bench, W.P. No. 102773 of 2026, 17 April 2026; read on Indian Kanoon, not found on gst.bharattax.net), a borewell contractor had paid Rs 62,46,056 of reversed common credit in September 2023, after an audit. An order of 28 December 2023 then confirmed Rs 48,25,066 of interest. The contractor said it never received the order, and filed SPL-02 on 18 July 2025, eighteen days after the general deadline. The application was rejected in SPL-07 solely as late. The Court held that the provision “uses the word ‘may,’ which is enabling and directory in nature, rather than the mandatory ‘shall’”. It quashed the rejection and directed the application to be considered. It kept the notice and the order in abeyance meanwhile.

The Madras High Court disagreed in Incompressible Fluid Control System v Assistant Commissioner (Madras High Court, W.P. No. 21378 of 2026 and connected petitions, 28 July 2026, Senthilkumar Ramamoorthy J; read on Indian Kanoon, not found on gst.bharattax.net). It declined to follow Sri Laxmi Borewell and a companion decision, Akshaya Borewells. The opening words of rule 164(6), “Any person who wishes to file”, show only that applying is optional. Read with the officer’s deadlines and the deemed approval in sub-rules (13) and (14), “the time limits prescribed in Rule 164 are mandatory”. The Court allowed for substantial compliance in narrow cases. Its example was an applicant who meets every condition, tries to file on the last day, and succeeds the next day after a proven technical glitch. The two High Courts are therefore in direct conflict on this point. No Supreme Court decision resolving it has been found.

Self-assessed tax. The same Madras judgment decided the larger question in that batch. Most petitioners had been refused the waiver because the demand was for interest on late GSTR-3B returns, following Circular 238, item 4. The Court held that “an implied exclusion of self-assessed tax liabilities cannot be read into Section 128A”. It also held that “the scope and ambit of Section 128A cannot be curtailed by the issuance of Circular No.238”. It drew the line where the department chose its route. If it recovered under section 79 relying on section 75(12), without proceedings under section 73, no application could be made. Once it chose to determine the liability under section 73, the waiver was available. The Court further held that an SPL-05, once issued, cannot be declared void except under rule 164(16) or (17). It cannot be done “by reference to Section 161 or otherwise”. And deemed approval under rule 164(14) operates only where the substantive conditions of section 128A were met.

The scheme in order

1. Identify the document: a section 73 notice or statement, a section 73 order, or an appellate or revisional order, for any part of July 2017 to March 2020. A section 74 notice qualified only if redetermined under section 73.
2. Compute the tax payable. Include IGST and cess and any erroneous refund element. Leave out credit now saved by section 16(5) or (6), and, after 27 March 2025, tax for later periods.
3. Pay by the date notified: DRC-03 against a notice, or against the liability register entry for an order, linking earlier DRC-03 payments through DRC-03A. The date was 31 March 2025, or six months from a redetermination order.
4. Withdraw any appeal, writ or SLP against the demand. For a mixed-period appeal, intimate that the covered years are not pursued.
5. File SPL-01 or SPL-02 within three months of the notified date, or six months from a redetermination order, with evidence of withdrawal.
6. Answer any SPL-03 within a month. Absent an order in time, the application is deemed approved.
7. After an SPL-05 or SPL-06, pay any additional tax from a departmental appeal, and any interest or penalty on uncovered parts, within three months. After an SPL-07, choose between appealing the rejection and restoring the original appeal.

This is the last guide in “Appeals and rulings, step by step”. The first guide in the group sets out the appeal ladder as a whole: The Appeal Ladder: Who Hears What, and When.