Amended and updated notes on section 74 of CGST Act, 2017. Detail discussion on provisions and rules related to determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts.
Chapter XV (Sections 73–84) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to demands and recovery. Section 74 of CGST 2017 provides for Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts.
Recently, we have discussed in detail section 73 (Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts) of CGST Act 2017. Today, we learn the provisions of section 74 of Central GST Act 2017.
Section 74 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. This notification was come into force from 1st July, 2017 i.e. the commencement date of section 74 is 1-7-2017.
| Name of Act | The Central Goods and Services Tax Act 2017 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Central Board of Indirect Taxes & Customs |
| Governing body | GST Council |
| Number of Chapters | 21 |
| Number of Sections | 174 |
| You are reading: | |
| Chapter No. | XV |
| Chapter Name | Demands and Recovery |
| Section No. | 74 |
| Section Name | Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts |
| Updated 2024 Edition | GST Law Book PDF |
Relevant Rules and Forms for GST Sections 73, 74 and 76:
- Rule 121: Recovery of credit wrongly availed
- Rule 142: Notice and order for demand of amounts payable under the Act
- FORM GST DRC – 01: Summary of Show Cause Notice
- FORM GST DRC – 01A: Intimation of tax ascertained as being payable under section 73(5)/74(5)
- FORM GST DRC – 02: Summary of Statement
- FORM GST DRC – 03: Intimation of payment made voluntarily or made against the show cause notice (SCN) or statement or intimation of tax ascertained through
- FORM GST DRC-01A.
- FORM GST DRC – 04: Acknowledgement of acceptance of payment made voluntarily
- FORM GST DRC – 05: Intimation of conclusion of proceedings
- FORM GST DRC – 06: Reply to the Show Cause Notice
- FORM GST DRC – 07: Summary of the order
- FORM GST DRC – 08: Summary of Rectification /Withdrawal Order
- Rule 142A: Procedure for recovery of dues under existing laws
- FORM GST DRC – 07A: Summary of the order creating demand under existing laws
- FORM GST DRC – 08A: Amendment/Modification of summary of the order creating demand under existing laws
Section 74 of Central GST – Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts1
Section 74 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017.
Section 74(1) of CGST Act
Section 74(1): Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.
Section 74(2) of CGST Act
Section 74(2): The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order.
Section 74(3) of CGST Act
Section 74(3): Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax.
Section 74(4) of CGST Act
Section 74(4): The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.
Section 74(5) of CGST Act
Section 74(5): The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.
Section 74(6) of CGST Act
Section 74(6): The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.
Section 74(7) of CGST Act
Section 74(7): Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.
Section 74(8) of CGST Act
Section 74(8): Where any person chargeable with tax under sub-section (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded.
Section 74(9) of CGST Act
Section 74(9): The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order.
Section 74(10) of CGST Act
Section 74(10): The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund.
Section 74(11) of CGST Act
Section 74(11): Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded.
Explanation 1: For the purposes of section 73 and this section, —
- (i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;
- (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded.
Explanation 2: For the purposes of this Act, the expression “suppression” shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.
- Section 74 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. ↩︎