What does this section say?

Section 128 of the CGST Act empowers the Government, on the recommendations of the GST Council, to waive fully or partially any penalty or late fee payable by taxpayers under the GST law. This provision has been incorporated to provide relief in deserving cases where strict enforcement of late fees or penalties may cause hardship to taxpayers or where the Government intends to encourage voluntary compliance.

The Government exercises this power through notifications issued from time to time. Such waivers are commonly announced during GST amnesty schemes, return filing drives, system-related difficulties, natural disasters, or other exceptional circumstances. The waiver may apply to a specific class of taxpayers, a particular tax period, or a specific type of default. It may also prescribe conditions that taxpayers must satisfy to avail the benefit.

The objective of this section is not to reward non-compliance but to provide an opportunity for defaulting taxpayers to regularize their GST compliance without facing excessive financial burden. Over the years, the Government has used this provision to waive late fees for delayed filing of GSTR-3B, GSTR-1, annual returns, and other statutory compliances, thereby helping businesses become compliant and reducing pending litigations.

Taxpayers should carefully review the conditions mentioned in waiver notifications because relief is generally available only if prescribed timelines and requirements are fulfilled.

Example

A taxpayer fails to file GST returns for several months. The Government later issues an amnesty notification waiving late fees subject to filing the pending returns within a specified period.

Key Points

• Government may waive penalties or late fees.
• Waiver is issued through notifications.
• Based on GST Council recommendations.
• Commonly used in amnesty and compliance schemes.
• Helps taxpayers regularize defaults.

One-Line Summary

Section 128 empowers the Government to waive GST penalties or late fees in specified cases to encourage compliance.