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CGGSTActSection-74

Section 74 of the Central Goods & Services Tax Act, 2017 outlines the procedures for addressing unpaid or short-paid taxes, erroneous refunds, and improperly utilized input tax credits due to fraud or misrepresentation. It details the notice requirements, the opportunity for taxpayers to pay owed amounts before formal proceedings, and the timeline for issuing orders related to tax determinations. The section also specifies penalties and conditions under which proceedings may be deemed concluded.

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26 views2 pages

CGGSTActSection-74

Section 74 of the Central Goods & Services Tax Act, 2017 outlines the procedures for addressing unpaid or short-paid taxes, erroneous refunds, and improperly utilized input tax credits due to fraud or misrepresentation. It details the notice requirements, the opportunity for taxpayers to pay owed amounts before formal proceedings, and the timeline for issuing orders related to tax determinations. The section also specifies penalties and conditions under which proceedings may be deemed concluded.

Uploaded by

patelkunj2301
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© © All Rights Reserved
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Central Goods & Services Tax Act, 2017

Section 74 : D etermination of tax not paid or short paid or erroneously


refunded or input tax credit w rongly availed or utilised by reason of
fraud or any w ilful-misstatement or suppression of facts
(1) Where it appears to the proper officer that any tax has not been paid or
short paid or erroneously refund ed or w here input tax cred it has been
w rongly availed or utilised by reason of fraud, or any w ilful-m isstatem ent
or suppression of facts to evade tax, he shall serve notice on the person
chargeable w ith tax w hich has not been so paid or w hich has been so short
paid or to w hom the refund has erroneously been m ad e, or w ho has
w rongly availed or utilised input tax cred it, requiring him to show cause as
to w hy he should not pay the am ount specified in the notice along w ith
interest payable thereon und er section 50 and a penalty equivalent to the
tax specified in the notice.
(2) The proper officer shall issue the notice und er sub -section (1) at least six
m onths prior to the tim e lim it specified in sub-section (10) for issuance of
ord er.
(3) Where a notice has been issued for any period und er sub -section (1), the
proper officer m ay serve a statem ent, containing the d etails of tax not paid
or short paid or erroneously refund ed or input tax cred it wrongly availed
or utilised for such period s other than those covered und er sub-section (1),
on the person chargeable w ith tax.
(4) The service of statem ent und er sub-section (3) shall be d eem ed to be
service of notice und er sub-section (1) of section 73, subject to the cond ition
that the ground s relied upon in the said statem ent, except the ground of
fraud, or any w ilful-m isstatem ent or suppression of facts to evade tax, for
periods other than those covered und er sub-section (1) are the sam e as are
m entioned in the earlier notice.
(5) The person chargeable w ith tax m ay, before service of notice und er sub-
section (1), pay the am ount of tax along w ith interest payable und er section
50 and a penalty equivalent to fifteen per cent. of such tax on the basis of
his ow n ascertainm ent of such tax or the tax as ascertained by the proper
officer and inform the proper officer in w riting of such paym ent.
(6) The proper officer, on receipt of such inform ation, shall not serve any
notice und er sub-section (1), in respect of th e tax so paid or any penalty
payable und er the provisions of this Act or the rules mad e thereund er.
(7) Where the proper officer is of the opinion that the am ount paid und er sub-
section (5) falls short of the am ount actually payable, he shall proceed to
issue the notice as provid ed for in sub-section (1) in respect of such amount
w hich falls short of the am ount actually payable.
(8) Where any person chargeable w ith tax und er sub-section (1) pays the said
tax along w ith interest payable und er section 50 a nd a penalty equivalent
to tw enty-five per cent. of such tax w ithin thirty d ays of issue of the notice,
all proceed ings in respect of the said notice shall be d eem ed to be
conclud ed .

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Central Goods & Services Tax Act, 2017

(9) The proper officer shall, after consid ering the representation, if any, m ad e
by the person chargeable w ith tax, d eterm ine the amount of tax, interest
and penalty d ue from such person and issue an ord er.
(10) The proper officer shall issue the ord er und er sub -section (9) w ithin a
period of five years from the d ue d ate for furnishing of annual return for
the financial year to w hich the tax not paid or short paid or input tax cred it
w rongly availed or utilised relates to or w ithin five years from the d ate of
erroneous refund.
(11) Where any person served w ith an ord er issued und er sub-section (9) pays
the tax along w ith interest payable thereon und er section 50 and a penalty
equivalent to fifty per cent. of such tax w ithin thirty d ays of
com m unication of the ord er, all proceed ings in respect of the said notice
shall be d eem ed to be conclud ed.
Explanat ion 1.—For the purposes of section 73 and this section,—
(i) the expression “all proceed ings in respect of the said notice” shall not
includ e proceed ings und er section 132;
(ii) w here the notice und er the sam e proceed ings is issued to the m ain
person liable to pay tax and som e other persons, and such proceed ings
against the main person have been conclud ed under section 73 or
section 74, the proceed ings against all the persons liable to pay penalty
und er sections 122, 125, 129 and 130 are d eem ed to be conclud ed.
Explanat ion 2.—For the purposes of this Act, the expression “suppression”
shall m ean non-d eclaration of facts or inform ation w hich a taxable person
is required to d eclare in the return, statem ent, report or any other
d ocum ent furnished und er this Act or the rules m ad e thereund er, or failure
to furnish any inform ation on being asked for, in writing, by the proper
officer.

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