CBIC Streamlines GST Dispute Resolution through Latest Rule Amendments

The Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 11/2025-Central Tax to amend Rule 164 of the CGST Rules, 2017. This amendment primarily addresses how appeals are handled when tax demands span different time periods, and clarifies conditions under which refunds are disallowed.

Key Amendments Introduced:

Clarification on Refund Ineligibility

A new Explanation has been inserted in Rule 164(4), stating:

No refund shall be allowed for any tax, interest, or penalty already paid for the full period prior to the commencement of the Second Amendment Rules, 2025, if the demand raised in the show cause notice, statement, or order under Section 128A(1) of the CGST Act pertains partially to the eligible period (i.e., 01.07.2017 to 31.03.2020) and partially to a non-eligible period.

This change ensures that refunds are not processed for amounts already paid on parts of tax demand that fall outside the amnesty window under Section 128A.

Partial Withdrawal of Appeals – New Proviso Added

A second proviso is now added under Rule 164(7), offering a major relief to taxpayers involved in appeals:

If the tax demand in the appeal spans both eligible and non-eligible periods, the taxpayer need not withdraw the entire appeal. Instead, they can submit an intimation to the appellate authority or Tribunal that they do not wish to pursue the appeal for the amnesty-eligible period (01.07.2017 – 31.03.2020).

Based on this intimation:

The authority shall deem the appeal withdrawn for the eligible period.
The authority can then pass an order only for the non-eligible period as deemed appropriate.

This provision is supported by an Explanation for removal of doubt, ensuring clarity in application and administrative execution.

Context – Section 128A Amnesty Scheme

These amendments are integrally linked to the new amnesty scheme under Section 128A, which allows taxpayers to settle disputes for the period from July 2017 to March 2020, by paying tax dues and availing waiver of interest, penalty, and other consequences. The changes in Rule 164 are intended to make the scheme operationally smoother and legally unambiguous.

Impact on Taxpayers and Professionals

Taxpayers: Gain clarity on how to partially settle disputes without withdrawing the entire appeal.
Consultants & Advocates: Need to file clear intimation letters where partial withdrawal is intended.
Departmental Officers: Must recognize deemed withdrawal as per new rules and limit orders accordingly.

Conclusion

Notification No. 11/2025-Central Tax represents a procedural refinement to ensure smooth implementation of the GST amnesty scheme under Section 128A. By enabling partial withdrawal of appeals and disallowing retroactive refunds, it balances administrative efficiency with taxpayer convenience.

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Source: CBIC

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