CBIC updates: Key Changes in Rule 164 & Amnesty Scheme

 The Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 11/2025 on March 27, 2025, which made important changes to Rule 164 of the Central Goods and Services Tax (CGST) Rules, 2017. This amendment is especially important for businesses and taxpayers dealing with old tax demands, appeals, and refunds under Section 128A of the CGST Act, 2017.

Key Highlights of the Notification

Here are the key changes introduced by Notification No. 11/2025, including partial appeal withdrawal, no refunds for past payments, and new procedures for settling GST disputes under the amnesty scheme.

• Partial Withdrawal of Appeals Allowed – Taxpayers can now withdraw appeals only for the period July 1, 2017 – March 31, 2020, while continuing to contest tax demands for later periods.
• No Refund for Paid Dues – Any tax, interest, or penalties already paid for the specified period will not be refunded.
• New Procedure for Withdrawal – Taxpayers must submit FORM SPL-01 or SPL-02 and notify the appellate authority to withdraw appeals partially.
• Clarified Role of Tax Tribunals – Appellate authorities must acknowledge partial appeal withdrawals and issue separate orders for later periods.  

The official CBIC notification is attached for your reference.

Background: The Need for Rule 164 Amendments

Before this amendment, there was a lot of confusion about what taxpayers needed to do if they wanted to settle their tax liabilities under Section 128A. The main issues were:

• If a taxpayer wanted to accept a tax demand for a certain period, did they have to withdraw their entire appeal?
• Could taxpayers partially withdraw an appeal to settle one part of a tax dispute while continuing to contest the rest?
• What happens if a taxpayer has already paid tax, interest, or penalties for the period covered under Section 128A? Could they claim a refund?

Because the rules were unclear, many taxpayers hesitated to settle their tax disputes, leading to delays, confusion, and unnecessary legal battles. The new amendment to Rule 164 provides clear answers to these issues.

New Amendment to Rule 164: Key Changes Introduced by Notification No. 11/2025

Find out how the latest CBIC amendment simplifies GST appeals, tax settlements, and the GST Amnesty Scheme:

Partial Withdrawal of Appeals Now Allowed

Previously, taxpayers were often required to withdraw their entire appeal if they wanted to settle tax liabilities under Section 128A. This posed a challenge for those who wanted to accept tax demands for one period while continuing to contest demands for another.

Amendment:

• Taxpayers can now withdraw their appeal only for the specified period (July 1, 2017 – March 31, 2020) while maintaining their right to contest demands for subsequent periods.
• This reduces litigation and enables a faster resolution of cases covered under the amnesty scheme.

No Refund for Taxes Already Paid for the Specified Period

Another major clarification pertains to refund claims for tax amounts already paid under Section 128A. Many taxpayers who made payments before this notification sought refunds, arguing that they had overpaid or had settled liabilities in a different manner.

Amendment:

• No refunds will be granted for any tax, interest, or penalty already paid for the period July 1, 2017 – March 31, 2020.
• This ensures that settled tax liabilities remain final, preventing unnecessary refund claims that could burden tax administration.

Mandatory Intimation to Appellate Authorities

The amendment introduces a structured process for taxpayers who wish to partially withdraw their appeals.

Procedure:

• Taxpayers must file FORM SPL-01 or FORM SPL-02 to indicate their intention to settle tax dues for the period covered under Section 128A.
• Upon filing the form, taxpayers must intimate the appellate authority or tribunal about their decision to withdraw the appeal for the specified period.
• The appellate authority must then record the withdrawal and issue an order acknowledging the limited withdrawal.
• For periods outside Section 128A, the appeal will continue as usual.

Ensuring Proper Implementation by Appellate Tribunals

To avoid misinterpretation and misapplication of the new provisions, the amendment requires appellate authorities and tribunals to pass orders that explicitly acknowledge the limited withdrawal.

• Appellate tribunals must ensure that the taxpayer’s right to contest later tax periods remains intact.
• Orders must be issued separately for periods outside the scope of Section 128A, avoiding any unintended dismissal of appeals. 

How These Changes Benefit Taxpayers?

The changes introduced in Notification No. 11/2025 bring several benefits for businesses and individual taxpayers:

• Easier Settlement of Tax Disputes: Taxpayers can settle past dues without affecting their ability to challenge future tax demands.
• Less Legal Hassle: By allowing partial appeal withdrawal, the amendment reduces time-consuming litigation and speeds up dispute resolution.
• No More Confusion on Refunds: The no-refund rule ensures that taxpayers and tax officials know exactly what to expect.
• More Efficient Tax Administration: With clear guidelines on appeal withdrawals, tax authorities can process cases more smoothly, reducing delays and backlogs.

Conclusion: What Should Taxpayers Do Now?

CBIC’s Notification No. 11/2025 is a big step toward simplifying tax disputes and making it easier for taxpayers to comply with GST rules. Here’s what businesses and individuals should do now:

• If you have an ongoing appeal covering the period July 1, 2017 – March 31, 2020, you can choose to withdraw it partially if you want to settle your tax dues for that time frame.
• If you have already paid tax, interest, or penalties for that period, be aware that you cannot claim a refund under these new rules.
• If you want to continue contesting tax demands for later periods, you do not have to withdraw your entire appeal—you can use FORM SPL-01 or SPL-02 to settle only the covered period.
• Stay informed and consult a tax professional if you need further guidance on how these changes affect your specific case.

With these amendments, CBIC has provided much-needed clarity on how tax appeals and payments should be handled, helping businesses and individuals avoid unnecessary tax disputes and ensuring faster resolution of past tax liabilities.

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Frequently Asked Questions

1. What is Rule 164 of the CGST Rules?

Rule 164 of the CGST Rules, 2017, lays down the procedures for appeals and dispute resolution under GST. The latest amendment (via Notification No. 11/2025) clarifies how taxpayers can withdraw appeals for specific periods and ensures smooth implementation of the GST Amnesty Scheme under Section 128A of the CGST Act.

2. What is the GST Amnesty Scheme?

The GST Amnesty Scheme (introduced under Section 128A of the CGST Act) provides relief to taxpayers with old pending tax demands (from July 1, 2017 – March 31, 2020). It allows them to settle disputes by paying the tax amount while getting waivers on interest and penalties.

3. What changes were made to Rule 164 in Notification No. 11/2025?

The key changes include:

• Taxpayers can withdraw appeals only for the 2017-2020 period while continuing to contest other tax demands.
• No refund is allowed for tax, interest, or penalties already paid for this period.
• A clear procedure (FORM SPL-01 & SPL-02) is introduced for partial appeal withdrawals.

4. Who is eligible for benefits under Section 128A of the CGST Act?

Taxpayers who:

• Have pending GST disputes related to the period July 1, 2017 – March 31, 2020.
• Are willing to pay the tax demand and avail waiver of interest and penalties.
• Have already made payments via GSTR-3B before November 1, 2024 and want to confirm their eligibility.

5. Can I get a refund if I already paid my tax for 2017-2020?

No, the new rules clearly state that if you have already paid tax, interest, or penalties for the covered period, you cannot claim a refund under the amnesty scheme.

6. How can I withdraw my GST appeal under the new rules?

Taxpayers must:

• File FORM SPL-01 or SPL-02 to apply for a partial withdrawal.
• Notify the appellate authority or Tribunal about the withdrawal for the specified period.
• The authority will record the request and issue an order acknowledging it.

7. What should I do if my appeal covers both pre-2020 and later periods?

The amendment allows you to:

• Withdraw the appeal only for 2017-2020 and settle that period.
• Continue contesting tax demands for later periods (without withdrawing the entire appeal).

8. How does this amendment benefit taxpayers?

• Faster dispute resolution – No need to fight long legal battles.
• Clarity on appeal withdrawals – Taxpayers don’t have to withdraw full appeals.
• No penalties & interest – More savings under the amnesty scheme.
• Simplified compliance – Clear steps for settlement and appeals.

9. Where can I get expert help on GST disputes & amnesty claims?

If you need professional guidance on Rule 164 amendments, GST Amnesty benefits, or appeal withdrawals, consult IndiaFilings for expert assistance.

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