Section 73 and74

This discussion clarifies whether penalties under Sections 73 and 74 of the CGST Act can be paid using the electronic credit ledger. Generally, the credit ledger is for 'output tax' only, meaning penalties must be paid from the cash ledger. However, recent amendments offer an option where if you pay the ascertained tax and interest promptly in response to a Section 74(5) notice, you may only need to pay a reduced penalty.