Arjuna (Fictional Character): Krishna, The Hon'ble Finance Minister has recently presented the budget for 2024, which has brought about many proposals of changes in the Tax laws, there have been talks about the proposed insertion of a new section, Section 128A, in the GST laws. Many taxpayers are confused and have questions regarding this new section. Could you please explain what this new section is all about?
Krishna (Fictional Character): Arjuna, Section 128A is being introduced to address issues related to the payment of interest and penalties on certain tax dues. This section aims to simplify and conclude pending proceedings under specific conditions.
Arjuna (Fictional Character): Krishna, what are the key provisions of this new Section 128A?
Krishna (Fictional Character): Arjuna, here are the key points of Section 128A that one should be aware of:
1. No Interest and Penalty for Certain Periods: If a taxpayer has received a notice or an order for the non-payment or short payment of tax without the intention of fraud for the period between 01/07/2017 to 31/03/2020, and if they have paid the full amount of tax payable as per notice or order, then no interest and penalty will be payable. All proceedings regarding such notice or order will be considered concluded.
2. Section 74 Notices: If a notice was issued under Section 74, which addresses tax dues involving fraud or wilful misstatement, but the Appellate Authority, Appellate Tribunal or a court finds it unsustainable, the proper officer will then treat it as a notice under Section 73, which covers tax dues without fraud or wilful misstatement. Consequently, Section 128A will then apply, potentially allowing for the waiver of interest and penalties if the tax amount is paid.
3. Conditions for Completion of Proceedings: If an application or appeal is filed towards the Appellate Authority, Appellate Tribunal or the court against an order of respective authorities, the person must pay any additional tax as ordered by the Appellate Authority, Appellate Tribunal or the court within three months for Section 128A to apply.
4. No Refund of Interest and Penalty: If interest and penalty have already been paid for the said period, no refund will be available under this section.
5. Exclusions: - The provisions of this section do not apply to amounts payable due to erroneous refunds.
- If an appeal or writ petition is pending before Appellate Authority or Appellate Tribunal or a court and has not been withdrawn, the provisions of this section will not apply.
6. Finality of Proceedings: If the amount of tax specified under notice or order is paid and proceedings are deemed concluded, no appeal to Appellate Authority and Appellate Tribunal can be filed against such order.
Arjuna (Fictional Character): Krishna, how does this benefit the taxpayers?
Krishna (Fictional Character): Arjuna, this section aims to simplify the tax compliance process by reducing the burden of interest and penalties for past periods, provided the principal tax amount is paid. It also ensures that cases are concluded swiftly, reducing prolonged litigation and uncertainties for taxpayers.
Arjuna (Fictional Character): Krishna, are there any specific conditions taxpayers should be aware of?
Krishna (Fictional Character): Yes, Arjuna, taxpayers must ensure that any additional tax amounts due as per orders from authorities are paid within the stipulated three months. Additionally, if they have ongoing appeals or writs, they need to withdraw them to benefit from this section.
Arjuna (Fictional Character): Krishna, this seems like a significant relief for many taxpayers. When will these provisions be applicable?
Krishna (Fictional Character): Arjuna, the specific date for the applicability of these provisions will be notified by the government. Taxpayers should stay informed and act accordingly to benefit from this new section.
Arjuna (Fictional Character): Krishna, what should be the key takeaway for taxpayers from this new section?
Krishna (Fictional Character): Arjuna, the key takeaway is that the government is taking steps to simplify the GST compliance process and reduce the burden of penalties and interest for past periods. Taxpayers should ensure timely payment of taxes and be aware of the conditions to benefit from these provisions.
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