![]()
Comparative Analysis of
Sections 73, 74, and 74A under the GST Act -Navigating Tax Compliance
Understanding tax
regulations is crucial for ensuring compliance and avoiding penalties. Sections
73, 74, and the newly introduced Section 74A of the tax law outline specific
procedures and penalties for different scenarios involving non-payment or short
payment of taxes, erroneous refunds, and wrongly availed input tax credits
(ITC). Section 73 deals with non-fraudulent cases, Section 74 addresses
fraudulent activities involving wilful misstatements or suppression of facts,
and Section 74A, applicable from the financial year 2024-25 onwards, covers
both fraudulent and non-fraudulent cases with updated rules and penalties. This
comparative analysis of section 73/74/74A simplifies and help taxpayers to understand
their obligations and rectify issues efficiently
|
Sr. No.
|
Aspect
|
Section 73
|
Section 74
|
Section 74A
|
|
1
|
Scope
|
Deals with cases of
non-payment or short payment of tax, erroneous refund, or ITC wrongly availed
or utilized, not involving fraud or willful misstatement.
|
Deals with cases involving
fraud, willful misstatement, or suppression of facts.
|
Deals with non-payment,
short payment, erroneous refund, or wrongly availed/utilized ITC for
financial year 2024-25 onwards, applicable to both fraudulent and
non-fraudulent cases.
|
|
2
|
Time Limit for Notice
|
3 years from the due date
for filing annual return or from the date of erroneous refund.
|
5 years from the due date
for filing annual return or from the date of erroneous refund.
|
42 months from the due date
for filing annual return or from the date of erroneous refund.
|
|
3
|
Penalty
|
10% of the tax due or
₹10,000, whichever is higher.
|
Equal to the amount of tax
evaded or input tax credit wrongly availed/utilized.
|
Non-fraudulent: 10% of the
tax due or ₹10,000, whichever is higher. Fraudulent: Equal to the tax due.
|
|
4
|
Self-Rectification Before
Notice
|
Taxpayer can pay the tax
along with interest before issuance of notice and inform the officer to avoid
notice.
|
Taxpayer can pay the tax
along with interest and 15% penalty before issuance of notice to avoid
notice.
|
Non-fraudulent: Pay tax and
interest to avoid notice. Fraudulent: Pay tax, interest, and 15% penalty to
avoid notice.
|
|
5
|
Self-Rectification After
Notice
|
Taxpayer can pay the tax
along with interest within 30 days of issuance of notice, and the proceedings
will be concluded without penalty.
|
Taxpayer can pay the tax,
interest, and 25% penalty within 30 days of issuance of notice to conclude
proceedings.
|
Non-fraudulent: Pay tax and
interest within 60 days to avoid penalty. Fraudulent: Pay tax, interest, and
25% penalty within 60 days to conclude proceedings.
|
|
6
|
Order Issuance
|
Within 3 years from the due
date of annual return or date of erroneous refund.
|
Within 5 years from the due
date of annual return or date of erroneous refund.
|
Within 12 months from the
date of issuance of notice, extendable by 6 months.
|
|
7
|
Extension of Order Issuance
Period
|
Not specified.
|
Not specified.
|
Commissioner or a senior
officer can extend the order issuance period by up to 6 months.
|
|
8
|
Penalty for Self-Assessed
Tax
|
If not paid within 30 days
from the due date, penalty applies.
|
If not paid within 30 days
from the due date, penalty applies.
|
Penalty applies if any
amount of self-assessed tax or collected tax is not paid within 30 days from
the due date.
|
|
9
|
Applicability
|
For non-fraudulent
cases.
|
For fraudulent cases
involving willful misstatement or suppression of facts
|
For all cases pertaining to
financial year 2024-25 onwards.
|
Key Takeaways
- Timeliness:
Pay attention to the time limits for notices and order issuance to avoid
penalties.
- Self-Rectification:
Utilize opportunities to rectify issues before and after receiving notices
to minimize penalties.
- Awareness:
Understand the severity of your case (fraudulent vs. non-fraudulent) to
anticipate the penalties and procedures involved.
Understanding these
sections can help you comply with tax regulations more effectively and avoid
unnecessary penalties.
Disclaimer: All the
Information is based on the notification, circular and order issued by the
Govt. authority and judgement delivered by the court or the
authority information is strictly for educational purposes and on the
basis of our best understanding of laws & not binding on anyone.
Click here
