CGST Section 128 — Power to waive penalty or fee or both
CGST Act · Power to waive penalty or fee or both
Quick Answer
Section 128 of the CGST Act, 2017 governs Power to waive penalty or fee or both. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 128 GST: Power to waive penalty or fee or both — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Overview
Section 128 of the CGST Act, 2017 grants the Government the power to waive penalties or late fees (either partially or fully) levied under specific sections of the Act. This provision acts as a relief mechanism, allowing the Government to reduce the financial burden on taxpayers facing penalties due to specific circumstances.
Who Does This Apply To?
This section potentially applies to all classes of taxpayers registered under GST. The specific class affected depends on the notification issued by the Government. It indirectly impacts GST officers as they are responsible for implementing the waivers.
How It Works
The process for waiving penalties or late fees under Section 128 involves several key steps:
- Council Recommendation: The GST Council must first recommend the waiver. This ensures a broad consensus before any such relief is granted.
- Government Notification: Based on the Council's recommendation, the Government issues a notification specifying:
- The specific penalties (under Section 122, 123, or 125) or late fees (under Section 47) that are eligible for waiver.
- The class of taxpayers to whom the waiver applies (e.g., small businesses with turnover below a certain threshold).
- The mitigating circumstances under which the waiver will be granted (e.g., natural disasters, technical glitches).
- Application & Implementation: Taxpayers falling within the specified class and meeting the mitigating circumstances can then apply for the waiver, following the procedures outlined in subsequent rules or instructions. The GST officers will then process these applications based on the notification's criteria.
Important Conditions & Exceptions
- Condition 1: The waiver must be based on recommendations from the GST Council. This ensures a level of oversight and uniformity in the application of waivers across states.
- Condition 2: The waiver can be either partial or full, as determined by the Government in the notification. It's not mandatory to grant a full waiver; the Government can choose to waive only a portion of the penalty or late fee.
- Exception: The power to waive is limited to penalties specified under Sections 122, 123, and 125 and late fees specified under Section 47. It does not extend to other penalties or fees under the CGST Act.
Practical Example
A small business owner, operating a retail store in a flood-affected area, was unable to file their GSTR-3B return for the month of August due to network disruptions and damage to their records. This resulted in a late fee under Section 47. The GST Council, recognizing the widespread devastation caused by the floods, recommended a waiver of late fees for small businesses (turnover less than ₹50 lakhs) in the affected region for the month of August. Based on this recommendation, the Government issued a notification waiving the late fees. The business owner, being eligible under the notification, could then benefit from this waiver and avoid paying the late fee, usually calculated as ₹200 per day, subject to a maximum amount.
Key Amendments
No major amendments since enactment.
No case laws found for this section yet.
Browse all case laws →Frequently Asked Questions
Under what circumstances can penalties under the CGST Act be waived according to Section 128?
Section 128 of the CGST Act, 2017 grants the Government the power to waive, either partially or fully, penalties mentioned in Sections 122, 123, and 125, as well as late fees under Section 47. This waiver is applicable to specific classes of taxpayers and under mitigating circumstances, as specified in a notification issued based on the Council's recommendations.
Does Section 128 provide a blanket waiver for all penalties and late fees under GST?
No, Section 128 does not provide a blanket waiver. The power to waive penalties and late fees is discretionary and exercised by the Government through notifications. These notifications specify the class of taxpayers and the specific mitigating circumstances under which the waiver is applicable, based on the Council's recommendations.
Which penalties are covered under Section 128 of the CGST Act for potential waiver?
Section 128 specifically covers penalties under Section 122 (related to specific offenses), Section 123 (failure to furnish information return), and Section 125 (general penalty) of the CGST Act. It also covers late fees charged under Section 47 for delayed filing of returns. The government can choose to waive these penalties based on its discretion.
How can I find out if a specific penalty has been waived under Section 128?
The government exercises its power to waive penalties under Section 128 through the issuance of official notifications. Taxpayers should regularly check the official websites of the CBIC (Central Board of Indirect Taxes and Customs) and GSTN (Goods and Services Tax Network) for relevant notifications pertaining to penalty waivers applicable to their specific situation.
Who recommends the waiver of penalty/late fee under Section 128?
The GST Council is the recommending authority for waiving penalties or late fees under Section 128. The Government considers the recommendations of the Council before issuing any notification regarding waivers for specific classes of taxpayers and under specified mitigating circumstances.
Are there any time limits or conditions associated with waivers issued under Section 128?
Yes, any waiver issued under Section 128 will invariably be subject to the conditions and time limits specified in the relevant notification. These conditions may include specific taxpayer categories, types of returns involved, and the period for which the waiver is valid. Taxpayers must comply with these stipulations to avail of the waiver.
What are some examples of 'mitigating circumstances' that might lead to a waiver of penalty under Section 128?
While the specific mitigating circumstances are defined in the notifications, examples could include natural disasters, widespread disruptions due to government policy changes (like initial GST implementation challenges), or genuine hardships faced by a specific sector due to unforeseen economic downturns. The GST Council assesses the overall impact and recommends waivers accordingly.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Government's Discretionary Power | The Government holds the authority to waive, either partially or fully, specific penalties or late fees. |
| Notification Required | Any waiver of penalty or fee must be formally announced through a government notification. |
| Council Recommendation | The Government's decision to waive is based on the recommendations of the GST Council. |
| Specific Taxpayers Targeted | Waiver applies to a defined class of taxpayers, not universally. |
| Mitigating Circumstances Considered | Waivers are granted under specific, extenuating circumstances, as detailed in the notification. |
| Penalties under Sections 122, 123, 125 | The power to waive extends to penalties imposed under sections 122, 123 and 125 of the CGST Act, covering offenses like fraud and obstruction. |
| Late Fee under Section 47 | The provision covers late fees applicable under section 47 of the CGST Act, related to delayed return filing. |
No related notifications found for this section.
Browse all notifications →Amendment History
No numbered amendments recorded for this section.