What does Section 128 mean?
This means a taxpayer cannot normally say, “Section 128 allows me to cancel my penalty.” Section 128 is an enabling power. The actual waiver becomes available when the Government issues the relevant notification and the taxpayer falls within its conditions.
Table of Contents
1. Statutory text of Section 128
The Government may, by notification, waive in part or full, any penalty referred to in section 122 or section 123 or section 125 or any late fee referred to in section 47 for such class of taxpayers and under such mitigating circumstances as may be specified therein on the recommendations of the Council.
The wording establishes several important conditions: the Government acts by notification; the waiver may be partial or complete; the provision covers penalties referred to in Sections 122, 123 and 125 and late fee referred to in Section 47; and the notification specifies the class of taxpayers and mitigating circumstances. The power is exercised on the recommendations of the GST Council. The current wording is reproduced in recent GST bare-law compilations.
2. Section 128 explained in very simple language
Suppose the Government wants to give relief to a particular group of taxpayers because there was a genuine difficulty, special circumstance, administrative issue, natural calamity, system-related problem or another circumstance considered appropriate under the relevant notification.
Section 128 provides the legal power to create that relief through a notification. The notification can specify who gets the benefit, what penalty or late fee is covered, how much is waived, for what period, and what conditions must be satisfied.
Therefore, Section 128 works more like a framework for targeted waiver rather than an automatic taxpayer right available whenever a penalty or late fee exists.
Section 128 gives the power
The Act authorises the Government to issue a notification granting specified waiver.
Notification gives the actual relief
The taxpayer must check the particular notification to know whether the waiver applies.
GST Council recommends
The statutory wording links the Government's notification power to recommendations of the GST Council.
Conditions matter
A waiver may apply only to a specified class, period, circumstance, return or compliance situation and may have conditions.
3. What exactly can be waived under Section 128?
| Category | Provision referred to by Section 128 | What Section 128 permits |
|---|---|---|
| Penalty for specified offences/contraventions | Section 122 | Government may waive the penalty, partly or fully, for the specified class/circumstances in a notification. |
| Penalty connected with failure to furnish information return | Section 123 | Government may waive the penalty, partly or fully, where the notification covers the taxpayer/circumstances. |
| General penalty | Section 125 | Government may waive the penalty, partly or fully, subject to the notification. |
| Late fee | Section 47 | Government may waive late fee, partly or fully, for the specified class/circumstances. |
4. How does a Section 128 waiver actually work?
- A circumstance or compliance issue is identified. There may be a reason why targeted relief is considered appropriate.
- The GST Council considers/recommends relief. Section 128 expressly refers to recommendations of the Council.
- The Government issues a notification. This is essential because Section 128 says the waiver is by notification.
- The notification defines the scope. It may identify taxpayers, periods, forms, amounts, dates, circumstances and conditions.
- The taxpayer checks eligibility. The taxpayer must compare its facts against every condition.
- The waiver is applied according to the notified mechanism. Depending on the notification, the relief may be automatic through the system or may require a specified compliance/payment/action.
- Records should be retained. Keep the notification, relevant return/ledger details and evidence of satisfying conditions.
The important lesson is that Section 128 alone is not the calculation sheet. The notification made under it is what tells the taxpayer how the particular waiver operates.
5. What are “mitigating circumstances”?
The Act deliberately uses the expression “such mitigating circumstances as may be specified therein.” This means the Government's notification determines the circumstances for the particular waiver.
Therefore, a taxpayer should not assume that every personal or business difficulty automatically qualifies. The relevant notification must be checked.
Examples of circumstances that may be relevant to a notified waiver
- A specified category of taxpayers facing a defined compliance difficulty.
- A specified period during which a particular compliance requirement was affected.
- A particular class of return or statutory filing covered by the notification.
- Special circumstances recognised through Government/GST Council action.
- Any specific condition expressly stated in the notification.
6. Why is the notification so important?
The difference between “Section 128 exists” and “I qualify for a waiver” is the notification.
| Question | What to check in the notification |
|---|---|
| Who? | Whether the taxpayer class, registration type, turnover category or other specified class is covered. |
| What? | Whether the particular penalty or late fee is covered. |
| Which period? | The relevant tax period, financial year, filing period or date range. |
| How much? | Whether the waiver is full, partial, capped or subject to a specified amount. |
| What conditions? | Whether filing, payment, application, correction or another action is required. |
| By when? | Any deadline for satisfying the waiver conditions. |
| Exclusions? | Taxpayers, situations, returns or amounts specifically excluded. |
For this reason, a professional GST working paper should record the notification number/date and the exact clause under which the taxpayer claims relief.
7. Late fee under Section 47 – how Section 128 connects to it
Section 47 deals with late fee for delay in furnishing specified returns/details under the CGST framework. Section 128 specifically gives the Government power to waive, in part or full, any late fee referred to in Section 47, for the class of taxpayers and mitigating circumstances specified in the notification.
This is different from simply saying that the taxpayer was late. A late fee may arise under the law, while a subsequent notification under Section 128 may provide relief if the taxpayer satisfies the notified conditions.
8. Penalties under Sections 122, 123 and 125
Section 122
Section 122 contains penalties for specified offences/contraventions. Section 128 can be used by the Government to waive, partly or fully, a penalty referred to in Section 122 where the relevant notification covers the case.
Section 123
Section 123 concerns the penalty for failure to furnish an information return under the statutory framework. Section 128 expressly includes this section in the list of penalties that can be waived by notification.
Section 125
Section 125 is the general penalty provision. It applies where a person contravenes the CGST Act or Rules and no separate penalty is provided, with the penalty capable of extending to ₹25,000. Section 128 expressly permits waiver of a penalty referred to in Section 125.
9. Section 128 does not erase the underlying law automatically
A waiver notification does not mean that the underlying GST provision never existed or that every compliance failure is permanently forgiven.
Usually, the legal effect is narrower: a specified penalty or late fee is waived to the extent and under the conditions stated in the notification.
For example, if a notification waives a late fee for a specified filing period subject to filing by a specified date, it does not necessarily waive the tax payable, interest payable, or other unrelated statutory consequences.
Tax
Whether tax is payable is a separate question and depends on the relevant charging/demand provisions.
Interest
A penalty/late-fee waiver does not automatically mean interest is waived unless the relevant notification or another statutory provision says so.
Penalty
Only the penalty covered by the applicable waiver provision/notification receives the specified relief.
Late fee
Section 128 can provide notification-based waiver of late fee referred to in Section 47.
10. Section 128 vs Section 128A – very important distinction
Sections 128 and 128A both concern relief from penalties/fees or interest-related consequences, but they are not interchangeable.
| Point | Section 128 | Section 128A |
|---|---|---|
| Basic nature | General enabling power for specified waiver by Government notification. | Specific statutory waiver mechanism for interest or penalty, subject to its own conditions, relating to specified Section 73 demands and tax periods. |
| What is covered? | Specified penalties under Sections 122, 123, 125 and late fee under Section 47. | Interest or penalty or both relating to qualifying demands raised under Section 73 for the specified tax periods and subject to the statutory conditions. |
| Mechanism | Government notification based on GST Council recommendation. | Detailed statutory conditions and associated rules/notifications/circulars govern eligibility and implementation. |
| Nature of relief | May be partial or full as specified. | Relief operates under the special Section 128A framework. |
Section 128A was inserted with effect from 1 November 2024 as a separate provision concerning waiver of interest or penalty or both relating to qualifying Section 73 demands for specified tax periods. The GST Council's materials describe the original recommendation and scope, while CBIC subsequently issued implementation clarifications.
11. Practical examples in layman language
Example 1 – Late filing covered by a waiver notification
A taxpayer files a specified return late and late fee becomes payable. Later, the Government issues a Section 128 notification covering that taxpayer class and filing period, subject to specified conditions. If the taxpayer satisfies those conditions, the specified late fee can be waived to the extent stated in the notification.
Example 2 – Partial waiver
A notification provides for partial waiver rather than complete waiver. The taxpayer should not treat the entire late fee as zero. The working should calculate the amount remaining after applying the exact notified relief.
Example 3 – Full waiver
A notification specifies full waiver for a defined class of taxpayers under defined circumstances. A taxpayer within that class may receive full relief for the covered penalty/late fee, subject to the conditions and period specified.
Example 4 – Taxpayer outside the notified class
A waiver notification applies only to a particular category of taxpayers. Another taxpayer reads the notification and assumes it applies to everyone. That assumption is incorrect. The taxpayer must satisfy the class condition.
Example 5 – Correct period, wrong condition
A taxpayer's filing period is covered, but the notification requires filing by a specified date and the taxpayer misses that date. The taxpayer cannot ignore the condition merely because the period is covered.
Example 6 – Penalty under a section not listed in Section 128
A taxpayer faces a penalty under a provision other than Sections 122, 123 or 125. Section 128's text does not automatically extend its waiver power to every other penalty provision. The taxpayer must identify the specific legal basis for any available relief.
Example 7 – Late fee and tax are different
A waiver notification removes a specified late fee. That does not by itself cancel the tax liability in the return. The taxpayer must separately comply with tax payment requirements.
Example 8 – Interest and late fee are different
A taxpayer sees a late-fee waiver and assumes interest is also waived. That conclusion is unsafe unless the applicable notification or provision expressly provides interest relief.
Example 9 – Section 125 penalty
A taxpayer has a penalty under Section 125. If a Section 128 notification specifically covers that Section 125 penalty and the taxpayer meets the notified conditions, the specified penalty may be waived.
Example 10 – Section 128A is a different route
A taxpayer has a qualifying old Section 73 demand and is considering the special waiver mechanism under Section 128A. The taxpayer should test Section 128A's separate conditions rather than treating it as an ordinary Section 128 notification.
Example 11 – Multiple GST registrations
A company has GST registrations in several States. A waiver notification may contain conditions that have to be tested registration-wise, return-wise or taxpayer-class-wise. The finance team should not assume that relief for one GSTIN automatically means every GSTIN is covered.
Example 12 – Audit working paper
An auditor or finance manager sees that a late fee has been reduced after a waiver. The working paper should retain the relevant notification and the calculation showing original amount, waiver amount and balance, instead of merely recording “waived under Section 128.”
Example 13 – Portal amount still visible
A taxpayer sees an amount on the GST portal and assumes that no waiver exists. Conversely, a taxpayer sees an announcement and assumes the portal balance is automatically corrected. The correct approach is to read the operative notification and follow the specified implementation procedure.
Example 14 – Old notification
A taxpayer finds an internet article discussing a historical late-fee waiver. That article may relate to an expired or period-specific notification. Always verify the actual notification and its effective dates before applying it to a current filing.
Example 15 – Waiver does not mean “no compliance required”
A notification may waive a penalty or fee subject to filing or another action. Relief and compliance can therefore be linked. The taxpayer should complete the underlying compliance exactly as required.
12. Practical workflow for a GST department / finance team
- Identify the liability. Determine whether it is tax, interest, penalty or late fee.
- Identify the statutory section. For Section 128, check whether the penalty is referred to in Section 122, 123 or 125, or whether the amount is late fee referred to in Section 47.
- Search the operative notification. Do not rely only on a secondary article or social-media summary.
- Check the issue date and effective period. A historical waiver may not apply to a later period.
- Check taxpayer class. Confirm the GSTIN/taxpayer falls into the category specified.
- Check mitigating circumstances/conditions. Match every condition against actual records.
- Calculate relief. Show original amount, waived amount and remaining amount.
- Complete required compliance. File return, pay tax or perform another action if required by the notification.
- Reconcile the portal. Verify the electronic liability records after the relevant relief is implemented.
- Retain evidence. Keep notification, calculation and supporting documents.
13. Documents to keep for a Section 128 waiver working
Legal documents
- Section 128 text
- Relevant Government notification
- Any amendment/extension notification
- Relevant CBIC circular/clarification where applicable
Taxpayer records
- GSTIN details
- Return period
- Return filing acknowledgement
- Electronic liability ledger
Calculation
- Original penalty/late fee
- Waiver percentage/amount
- Waived amount
- Balance payable, if any
Compliance proof
- Payment challan where relevant
- Return ARN
- Portal screenshot/report where useful
- Internal approval and working paper
14. Common mistakes taxpayers make
No. The section is limited to the categories expressly referred to and operates through notifications specifying taxpayers and circumstances.
No. Relief depends on the Government's notification and the conditions specified under it.
Not automatically. Interest is a separate liability unless the applicable provision/notification provides otherwise.
No. Section 128 is a general notification-based waiver power for specified penalties/late fee; Section 128A is a separate special waiver provision relating to qualifying Section 73 demands for specified tax periods.
Use the operative Government notification and relevant official clarification as the primary reference for eligibility.
Not necessarily. Taxpayer class, filing date, payment condition and other requirements may also apply.
Usually the underlying filing obligation remains unless the relevant law or notification provides otherwise.
The text gives the waiver power to the Government by notification, on recommendations of the Council. It is not simply an individual officer deciding to waive a taxpayer's penalty under Section 128.
15. Section 125, 127 and 128 – understand the difference
| Section | Main subject | Simple explanation |
|---|---|---|
| 125 | General penalty | Penalty up to ₹25,000 where a contravention exists for which no separate penalty is provided. |
| 126 | General disciplines related to penalty | Sets safeguards and discipline for penalty proceedings within its scope. |
| 127 | Power to impose penalty in certain cases | Provides the proper officer a route to impose penalty in specified circumstances outside listed proceedings. |
| 128 | Power to waive penalty or fee or both | Allows Government, by notification, to waive specified penalties and Section 47 late fee for specified classes/circumstances. |
| 128A | Special waiver for specified Section 73 demands | Separate statutory mechanism for waiver of interest or penalty or both relating to qualifying Section 73 demands for specified tax periods. |
16. Management-level GST compliance checklist
- Maintain a current register of penalty and late-fee liabilities.
- Separate tax, interest, penalty and late fee in MIS reporting.
- When a waiver is announced, identify the exact notification before changing the liability working.
- Record the notification number, date and effective period.
- Test eligibility GSTIN-wise where necessary.
- Maintain a before-and-after waiver calculation.
- Do not write off a liability in books merely because a waiver is expected; confirm the legal and system position.
- Retain evidence of all conditions satisfied.
- Review whether the relief is under Section 128 or the separate Section 128A mechanism.
- Reconcile the GST portal after implementation.
17. Frequently Asked Questions about Section 128
It gives the Government power, by notification, to waive partly or fully specified penalties under Sections 122, 123 and 125 and late fee referred to in Section 47, for specified classes of taxpayers and mitigating circumstances, on the recommendations of the GST Council.
The Government may issue the waiver by notification. The section links this power to recommendations of the GST Council.
Yes. The section permits waiver “in part or full,” subject to the notification.
Yes. It specifically refers to late fee under Section 47.
Section 128 itself refers to specified penalties and Section 47 late fee, not a general waiver of interest. Section 128A is a separate provision dealing with specified interest/penalty relief in qualifying Section 73 demand cases.
No. A notification must provide the relevant waiver and the taxpayer must satisfy its conditions.
No. The text specifically refers to penalties under Sections 122, 123 and 125.
The particular Government notification specifies the circumstances in which the waiver is available. A taxpayer should therefore read the operative notification rather than applying a general definition.
Not merely because Section 128 exists. The relevant notification and its conditions determine how the relief applies.
Section 128 is a general notification-based waiver power for specified penalties and Section 47 late fee. Section 128A is a separate special waiver mechanism for qualifying Section 73 demands for specified tax periods.
No. A waiver of late fee does not by itself remove the underlying return-filing obligation.
No. A penalty waiver and tax liability are separate matters unless another specific provision provides tax relief.
Keep the relevant notification, taxpayer eligibility working, original liability calculation, waiver calculation, filing/payment proof and portal records.
Only if the notification's period and conditions cover the current return. Historical waiver announcements should not be assumed to remain available.
Use official Government/CBIC/GST Council sources and the actual notification rather than relying solely on third-party summaries.
18. Common Google search questions about GST penalty and fee waiver
- What is Section 128 of the CGST Act?
- Can GST penalty be waived?
- Can GST late fee be waived?
- Who has power to waive GST penalty?
- What is the difference between Section 128 and Section 128A?
- Can Section 125 penalty be waived?
- Can Section 122 penalty be waived?
- Can Section 123 penalty be waived?
- Does GST waiver notification waive interest?
- What are mitigating circumstances under GST penalty waiver?
- Is GST late fee waiver automatic?
- How to claim GST penalty waiver?
- How to check GST waiver notification?
- Does penalty waiver cancel GST tax liability?
- Does late fee waiver remove return filing requirement?
These are useful search questions, but the answer for a real taxpayer depends on the operative notification and the exact tax period, taxpayer category, liability and conditions.
19. Quick revision – Section 128 in 60 seconds
- Purpose: Power to waive specified penalty or fee.
- Who acts: Government, by notification.
- GST Council: Waiver is based on recommendations of the Council.
- Penalties covered: Penalties referred to in Sections 122, 123 and 125.
- Late fee covered: Late fee referred to in Section 47.
- Extent: Waiver may be partial or full.
- Eligibility: Only the class of taxpayers and mitigating circumstances specified in the notification.
- Important: Section 128 is not a blanket waiver of every GST penalty, interest or tax.
- Do not confuse: Section 128A is a separate special waiver provision for qualifying Section 73 demands.
20. Related CGST Act sections
Section 122 – Penalty for certain offences · Section 123 – Penalty for failure to furnish information return · Section 124 – Fine for failure to furnish statistics · Section 125 – General penalty · Section 126 – General disciplines related to penalty · Section 127 – Power to impose penalty in certain cases · Section 128A – Waiver of interest or penalty or both relating to demands raised under Section 73 · Section 129 – Detention, seizure and release of goods and conveyances in transit
Power to impose penalty in certain cases NextSection 129 →
Detention, seizure and release of goods and conveyances in transit
Legal disclaimer
This page is provided for general educational and GST compliance-workflow support. It is not a substitute for professional legal or tax advice. GST law can change through amendments, notifications, rules, circulars and judicial decisions. For an actual waiver claim, penalty proceeding or late-fee issue, verify the notification and law applicable to the relevant tax period and facts before taking action.