Section 128 of CGST Act - Power to Waive Penalty or Fee or Both
Section 128 of the Central Goods and Services Tax Act, 2017 empowers the Central Government, on the recommendations of the GST Council, to waive specified penalties or late fee for a class of taxpayers in notified mitigating circumstances.
Text and meaning of Section 128
The Government may, by notification, waive in part or full any penalty referred to in Section 122, Section 123 or Section 125, or any late fee referred to in Section 47, for such class of taxpayers or such mitigating circumstances as may be specified in the notification, on the recommendations of the GST Council.
In practical terms, Section 128 is an enabling provision. It does not automatically cancel every penalty or late fee. A taxpayer receives the benefit only when a Government notification issued under the section covers the relevant class of taxpayers, compliance period and circumstances.
What can be waived under Section 128?
| Provision | Subject | Relief contemplated by Section 128 |
|---|---|---|
| Section 122 | Penalty for certain offences | Penalty may be waived in part or full when covered by a notification. |
| Section 123 | Penalty for failure to furnish information return | Penalty may be waived in part or full. |
| Section 125 | General penalty | Penalty may be waived in part or full. |
| Section 47 | Late fee for delayed furnishing of specified returns/statements | Late fee may be waived in part or full. |
Conditions for exercise of the power
The statutory power is exercised by notification. The notification may identify the eligible class of taxpayers, specify the relevant tax period or compliance requirement, prescribe mitigating circumstances and state whether the waiver is full or partial. The power is exercised on the recommendations of the GST Council.
Section 128 and Section 128A are different
Section 128 should not be confused with Section 128A. Section 128 is the general enabling power to waive specified penalties or late fee by notification. Section 128A, introduced separately with effect from 1 November 2024, created a conditional waiver mechanism for interest or penalty or both in specified demands under Section 73 for financial years 2017-18, 2018-19 and 2019-20. Taxpayers considering relief under Section 128A should check the applicable statutory conditions, Rule 164 and current notifications/circulars.
Practical checklist for taxpayers
Before claiming a waiver, identify the exact penalty or late fee, confirm that the relevant notification covers the taxpayer and period, check all conditions and deadlines, retain proof of compliance/payment, and verify the current position on the official GST and CBIC portals. A general power under Section 128 should not itself be treated as an automatic entitlement to waiver.
Updated: 15 September 2026. This page is a general legal-information article; notification-specific eligibility should be verified from the current official text.