The GST Council has periodically introduced amnesty schemes allowing taxpayers to regularise non-filed returns, pending demands, and blocked ITC by paying tax with reduced or waived interest and penalties. In 2026, several schemes remain open or are expected—CA firms should proactively identify eligible clients before windows close.
Key GST Relief Provisions Active / Expected in 2026
1. Section 128A — Waiver of Interest and Penalty (Budget 2024)
Section 128A was introduced in Budget 2024 to provide a one-time waiver of interest and penalty for genuine tax disputes arising from FY 2017-18 to FY 2019-20. Key features:
| Parameter | Details |
|---|---|
| Periods covered | FY 2017-18, 2018-19, 2019-20 |
| Demand types eligible | Demands under Section 73 (non-fraud/wilful misstatement) |
| Benefit | Full waiver of interest and penalty if tax is paid |
| Not eligible | Demands under Section 74 (fraud or suppression of facts) |
| Condition | Full tax must be paid; partial payment does not qualify |
CA firms should review all clients with pending GST demands for FY 2017-20 and assess whether Section 128A waiver applies. Filing the waiver application before the notified deadline is critical.
2. Amnesty for Non-Filed GSTR Returns
The GSTN/CBIC periodically opens amnesty windows where taxpayers can file pending GSTR-1, GSTR-3B, and GSTR-4 returns with reduced late fees. CA firms should:
- Identify all clients with pending returns (check GSTN portal under "File Returns" → any returns showing as "Not Filed")
- File all pending returns during the amnesty window
- After filing, check if ITC blockage is released and pending demand notices are resolved
3. GSTR-9/9C Amnesty (Annual Returns)
The government has periodically reduced late fees for pending GSTR-9 filings. Check GSTN notifications for active waivers on GSTR-9 for FY 2022-23 and FY 2023-24 if clients have outstanding annual returns.
How to Identify Eligible Clients
In your practice management system or client list, flag clients who have any of the following:
- GST demand notice (DRC-01, DRC-07) pending for FY 2017-20
- Missing GSTR-3B or GSTR-1 for any month in the past 3 years
- Blocked ITC (GSTR-2A vs GSTR-2B mismatch over 20%)
- Outstanding GSTR-9 for FY 2022-23 or FY 2023-24
Action Plan for CA Firms
| Step | Action | Priority |
|---|---|---|
| 1 | Audit all client GST filing history; identify gaps | High — do immediately |
| 2 | Check pending demand notices for FY 2017-20 under Section 73 | High |
| 3 | Assess Section 128A eligibility for each demand notice | High |
| 4 | File missing returns and settle demands during amnesty windows | Urgent — windows are time-limited |
| 5 | Reconcile ITC post-filing to ensure books are updated | Medium |
| 6 | Document all regularisation for client records | Medium |
What CA Firms Should Communicate to Clients
Proactively reach out to clients who may qualify for amnesty. Your communication should cover:
- Specific demands or missing filings identified
- Tax amount required to be paid for waiver eligibility
- Deadline for the amnesty window
- Consequence of not acting: interest + penalty becomes permanent, and recovery proceedings can begin
TaxZeo's GST compliance dashboard helps you spot missing returns, pending notices, and unreconciled ITC across your entire client base in one view.
Try TaxZeo FreeFrequently Asked Questions
What is the difference between Section 73 and Section 74 demands?
Section 73 covers demands where tax evasion was not intentional—cases of genuine error, wrong classification, or bonafide interpretation differences. Section 74 covers demands involving fraud, wilful misstatement, or suppression of facts. The Section 128A waiver only applies to Section 73 demands. If a client's demand was raised under Section 74, they are not eligible for the interest/penalty waiver.
Can a client pay part of the demand and get partial waiver under Section 128A?
No. Section 128A requires full payment of the tax component to qualify for the waiver. Partial payment does not qualify for partial waiver. This is a strict condition—the entire tax demand (excluding interest and penalty) must be paid in full to avail the benefit.
What happens to pending appeals if a client opts for Section 128A waiver?
The taxpayer must withdraw any pending appeal before a GST Appellate Authority or tribunal if they wish to avail the Section 128A waiver. You cannot simultaneously contest a demand in appeal and claim the waiver for the same demand. This is a strategic decision—the CA firm must advise the client on whether withdrawing the appeal and paying tax is the better outcome compared to continuing litigation.