Section 128A: the waiver that is arithmetic, not amnesty
Interest and penalty waived, tax payable in full, appeals withdrawn. Whether that is a good deal depends on a number, and the number is knowable.
Section 128A waives interest and penalty on demands raised under Section 73 for the financial years 2017-18, 2018-19 and 2019-20, provided the full tax is paid within the notified window and any pending appeal is withdrawn. Fraud cases under Section 74, erroneous refunds and cases not covered by the notification stay outside it.
Do not call it forgiveness
Section 128A does not say the demand was wrong. It says the Government will drop the interest and the penalty if you pay the tax and stop arguing.
For a demand of one crore in tax from FY 2018-19, interest and penalty can together exceed the tax. The waiver is therefore worth more than the amount in dispute in many files.
That is why the decision is arithmetic and not sentiment. Run the number, then decide.
Who is inside and who is outside
The waiver covers notices and orders under Section 73 for the three specified years. That includes a notice where no order has been passed, an order of the proper officer, and an order of the appellate authority, each with its own form.
It does not cover demands under Section 74. It does not cover erroneous refunds. And it does not cover cases where the amount payable is not tax at all, such as a demand of interest alone or a penalty only order.
There is one commercially important exclusion people discover late. Where the department invoked Section 74 and the appellate authority later reduced it to Section 73, examine whether the file enters the scheme. That sequencing has decided several matters.
The withdrawal sequencing risk
Under Section 128A the appeal must not remain pending. That single requirement creates the biggest execution risk in the whole scheme.
An appeal filed within the permitted period can be withdrawn on the portal. Filed later, withdrawal needs the approval of the appellate authority. Once approved, the status changes from appeal submitted to appeal withdrawn, and GSTN requires a screenshot of that status to be uploaded with the waiver application.
Read that sequence carefully. You withdraw first, then apply. If the application then fails for an eligibility reason, the appeal is gone.
So confirm eligibility in writing before you touch the appeal. Never withdraw on the assumption that the waiver will follow.
SPL-01, SPL-02 and the portal problems that are real
Where no order has been passed and the case is at the notice stage, the application is in SPL-01. Where an order has been passed, it is SPL-02.
GSTN has acknowledged filing issues on both, including order numbers not being found and payment details not matching. The advisory guidance is to verify the payment against the electronic liability ledger where Table 4 of SPL-02 does not auto populate, and then file.
Keep evidence of every failed attempt. A portal failure that is documented is a ground. A portal failure that is only remembered is not.
The Waiver Arithmetic
Four numbers decide it.
The tax in dispute. The interest and penalty that the waiver removes. The pre deposit already made, which you forfeit the use of if you were going to win. And the honest probability that you win on appeal.
Multiply the disputed tax by your probability of success. Compare that against the interest and penalty saved. If the saving exceeds the expected recovery, take the waiver. If it does not, litigate and mean it.
Most taxpayers overstate their probability of success by a wide margin. Ask your counsel for a number, not for comfort.
Exhibit 1 — Section 128A eligibility at a glance
| Situation | Covered | Form | Watch out for |
|---|---|---|---|
| Section 73 notice, no order yet, FY 2017-18 to 2019-20 | Yes | SPL-01 | Full tax must be paid within the notified window |
| Section 73 order of the proper officer, same years | Yes | SPL-02 | Payment mapping in Table 4 may not auto populate |
| Appellate order arising from a Section 73 demand | Yes | SPL-02 | Pending further appeal must be withdrawn first |
| Section 74 demand | No | Not applicable | Examine whether the appellate authority reduced it to Section 73 |
| Erroneous refund demand | No | Not applicable | Outside the scheme even for the covered years |
| Interest or penalty only demand | No | Not applicable | There is no tax component to pay |
The notified payment window and covered categories are those in force on 3 September 2026. Confirm before filing.
What to do on Monday
List every open demand for FY 2017-18 to 2019-20 with the section invoked, the tax, the interest and the penalty separately.
Compute the Waiver Arithmetic for each file and mark it take, litigate or borderline.
For every take file, confirm eligibility in writing before withdrawing any appeal.
For every litigate file, check that the appeal is properly constituted and that the pre deposit is correctly mapped.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Can I take the waiver for one year and litigate another?
Yes. Eligibility is examined demand by demand. Segment your portfolio and decide each file on its own arithmetic.
Will the department reopen the same period later?
Closure under the scheme is in respect of the demand covered by the application. A separate issue for the same year, not covered by that demand, is a different matter.
Can the tax be paid using the electronic credit ledger?
Follow the payment mode prescribed for the scheme and the portal mapping for that form. Do not assume credit utilisation is permitted; verify before paying.
What if my withdrawal application is not approved in time?
Document the request, follow up in writing and place the correspondence on record. An approval delay caused by the authority is a ground; silence is not.
In this cluster
- SPL-01 and SPL-02: filing the Section 128A waiver application correctly
- Withdrawing an appeal to access the waiver: the sequencing risk
- Amnesty for revocation of cancelled registrations
- Late fee waivers for GSTR-9 and GSTR-10
- Should you settle or litigate? A decision framework
- Compounding of offences under Section 138
- Section 128A waiver: the eligibility and savings working sheet
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.