GST Demand under section 73 and 74

GST demand under section 73 and 74
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Last updated on September 8th, 2022 at 07:11 pm

GST Demand under section 73 and 74

It is possible that there is a difference in the way the taxpayer has interpreted the provisions of law and paid GST on a self-assessment basis and the way Department expects the taxpayer to interpret the provisions of law and pay taxes. There is no denial of the fact that there are tax evaders and fraudsters who wilfully make misstatements. But majorly it is because there is a gap in understanding, interpretation, and implementation of the law which results in tax demands, survey, scrutiny, litigation, assessment, adjudication, etc.

Demand under sections 73 and 74 – Demand and recovery proceedings when tax is not paid/short paid/erroneously refunded /ITC wrongly availed or utilized

GST law has laid down provisions that clearly define the rank of the officer who can issue notices, timelines for issuing notices, and timelines for passing the order. GST Department cannot unilaterally seek payment of tax without providing the opportunity of being heard for ascertaining reasons for non-payment/short payment/erroneous refund or excess claim of ITC.

Section 73 – If it was not done with intention of fraud or any wilful misstatement or suppression of facts

Section 73(2)Show Cause Notice mentioning the specific provision which has been violated can be issued within 33 months from the extended due date of filing the Annual Return for that financial year.

Section 73(10) – Order can be passed latest within 36 months from the extended due date of filing the Annual Return for that financial year.

 

Section 74 – If it was done with intention of fraud or any wilful misstatement or suppression of facts

Section 74(2)Show Cause Notice mentioning the specific provision which has been violated can be issued within 54 months from the extended due date of filing the Annual Return for that financial year.

Section 74(10)Order can be passed latest within 60 months from the extended due date of filing the Annual Return for that financial year.

Time Limit for issuance of notice and passing the order u/s 73 and 74 

Financial Year

GST Annual Return’s Due Date Section 73 Section 74
Original Extended Notice u/s 73(2) Order u/s 73(10) Notice u/s 74(2)

Order u/s 74(10)

2017-18

31.12.2018 05.02.2020/
07.02.2020
30.11.2022

30.06.2023

28.02.2023

30.09.2023

31.08.2024 28.02.2025
2018-19 31.12.2019 31.12.2020 30.09.2023 31.12.2023 30.06.2025

31.12.2025

2019-20

31.12.2020 31.03.2021 31.12.2023 31.03.2024 30.09.2025 31.03.2026
2020-21 31.12.2021 28.02.2022 30.11.2024 28.02.2025 31.08.2026

28.02.2027

2021-22

31.12.2022 31.12.2022 30.09.2025 31.12.2025 30.06.2027

31.12.2027

Note: For Financial Year 2021-22 it is presumed that the due date of GST Annual Return will not be extended.

Note: CBIC has extended the due dates for issuing notice u/s 73(2) and the time limit for passing order u/s 73(10) vide a CGST Notification no. 13/2022 dated 5th July 2022.

Note: The period of 24 months beginning from 1st March 2020 to 28th February 2022 shall be excluded for computation of the period of limitation in the cases of recovery of erroneous refund i.e. Notice u/s 73(2) for recovery of erroneous refund can be issued up to  30th June 2025.

Note: The period of 24 months beginning from 1st March 2020 to 28th February 2022 shall be excluded for computation of the period of limitation for filing a refund application u/s 54 or 55.

Who can issue the SCN u/s 73 & 74? |Monetary limits for issuing SCN

CBIC had notified the rank of officers based on monetary limits who can issue a notice under section 73 or 74 for non-payment of tax/short payment of tax/availing or utilizing input tax credit/ erroneously claiming the refund of tax.

 Officer of Central Tax  The monetary limit of evasion
 Superintendent of Central Tax   If CGST tax evasion is up to Rs 10 lacs
  If IGST tax evasion is up to Rs 20 lacs
  If CGST+IGST tax evasion is up to Rs 20 lacs
 Deputy or Assistant Commissioner of Central Tax  If CGST tax evasion is above Rs 10 lacs but up to Rs 1 crore.
 If IGST tax evasion is above Rs 20 lacs but up to Rs 2 crores.
 If CGST+IGST tax evasion is above Rs 20 lacs but up to Rs 2 crores.
 Additional or Joint Commissioner of Central Tax  If CGST tax evasion is above Rs 1 crore.
 If IGST tax evasion is above Rs 2 crores.
 If CGST+IGST tax evasion is above Rs 2 crores.
CA Ankita Khetan
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Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.

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