GST Order and Penalty

As per section 74 of CGST Act, You are required to pay only 15% penalty amount, if you pay your dues of Tax and interests in full, before show cause notice, and pay only 25% penalty amount if paid within 30 days of show cause notice.

for non fraud cases under section 74A, no penalty if paid within 60 days of SCN

If you received the notice under section 73, then no penalty if paid within 30 days of SCN.

Penalty in an audit order for FY 2020-21:

• Under Sec 73, penalty is 10% of tax or Rs 10,000, whichever is higher, waived if tax and interest are paid within 30 days of the SCN. Under Sec 74, penalty equals the tax, reduced to 50% if paid within 30 days of the order.

• If the order is under 74 without establishing fraud or suppression, challenge it in appeal (pre-deposit 10% of the disputed tax, within 3 months) asking for treatment under 73.

• FY 2020-21 isn't covered by the Sec 128A waiver (that's for FY 2017-20).

Yes—if the order is under Section 73, the penalty is waived when the tax and interest are paid within 60 days from communication of the order. The provision is the second proviso to Section 73(9) of the CGST Act (and the corresponding State GST Act). This applies to a non-fraud case; it is not a general 60-day concession for every GST order. The waiver is statutory, so a separate notification is not required.

Check the order’s section and the date it was communicated. If it is under Section 74 (fraud, wilful misstatement or suppression), the Section 73 waiver does not apply; Section 74 has different payment windows and penalty consequences. The GST Council’s 53rd meeting recommended a 60-day period, but rely on the enacted amendment applicable to your order and the relevant State Act—not the recommendation alone.

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