The Central Goods and Services Tax (Second Amendment) Rules, 2025, mark another important step in the evolution of India’s GST framework. These changes, which came into effect from the date of their publication in the Official Gazette, primarily amend Rule 164 of the Central Goods and Services Tax Rules, 2017. The amendments aim to streamline the appeal and refund processes in cases involving overlapping tax periods under scrutiny.
What’s New in the Amendment?
The Second Amendment focuses specifically on addressing ambiguities related to appeals and refund claims where tax demands span across multiple periods — some of which fall within the specific time window defined in Section 128A(1) of the CGST Act.
Here’s a breakdown of the key modifications:
- Clarification on Refund Eligibility (Amendment to Rule 164(4))
The amended Rule 164(4) now includes a vital clarification. After the phrase “after payment of the full amount of tax,” the following has been inserted: “related to period mentioned in the said sub-section and”. This means that taxpayers are now clearly informed that refund eligibility is tied specifically to taxes paid for the period as mentioned in Section 128A(1).
- Introduction of a New Explanation Regarding Refund Restrictions
A new explanation has been added after Rule 164(4), which clarifies that no refund will be granted for any tax, interest, or penalty already discharged for the entire period prior to the enforcement of this Amendment. This applies especially in cases where tax demands span both the period covered under Section 128A(1) and other periods. In essence, if a taxpayer has already paid dues covering both periods, they can’t claim a refund even if some part of that demand relates to a period eligible for relief.
- Changes to Rule 164(7): Intimation Instead of Withdrawal
Previously, taxpayers had to withdraw their appeal entirely if they wanted to settle under Section 128A. Now, a more flexible approach has been introduced. Taxpayers can intimate the appellate authority or tribunal that they don’t wish to pursue the appeal for the specific period covered under Section 128A(1), rather than withdrawing it completely.
This new provision enables authorities to continue adjudicating the appeal for the period outside the Section 128A timeframe — a move that ensures fair treatment and minimizes litigation.
- Deemed Withdrawal of Appeals for a Specific Period
An important clarification (Explanation to Rule 164(7)) has also been added: for administrative and legal clarity, the appeal shall be deemed to have been withdrawn for the period between 1st July 2017 and 31st March 2020, or part thereof, as applicable under Section 128A.
