GST Council to use Section 11A for retro tax relief in rare cases: Revenue Secy

Corresponding circular detailing the application and interpretation of the law is still awaited.

The newly introduced Section 11A of the GST Act 2017, through an amendment, will be used in “rarest of the rare cases” to offer retrospective Goods and Services Tax (GST) relief, Revenue Secretary Sanjay Malhotra clarified after the GST Council's September 9 meeting.

“It’s not a usual section to be used. It has to be used in the rarest of rare cases. It’s not to be used generally. As a matter of fact, we would not like to issue a circular at this point. Nothing was discussed regarding it in the September 9 meeting,” Malhotra said.

Section 11A, recently introduced through an amendment, aims to shield businesses from punitive retrospective tax demands. This provision is expected to provide relief to industries such as the real-money gaming (RMG) sector, which has been struggling with substantial GST dues from the period between July 1, 2017—when GST was implemented—and March 31, 2023.

The council’s June meeting had initially suggested Section 11A as a legal safeguard against such demands. However, Malhotra emphasised that a corresponding circular detailing the application and interpretation of the law is still awaited. The circular, once discussed and approved by the council, will provide guidance on how to apply Section 11A.

Last December, the Union Finance Ministry reported that 71 show cause notices were issued to online gaming companies for alleged GST evasion, amounting to over Rs 1.12 lakh crore.

The circulars, once approved and issued, are likely to mitigate litigation and enhance ease of doing business by addressing past trade practices and resolving long-standing tax disputes.