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What is difference between section 73 and 74?

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Krunal Icecreamwala

4 Points Posted on 08 February 2020

1) Where in applying section 73 and 74?
2) What is notice and penalties procedures?

Replies (3)

Quick Summary

This discussion clarifies the distinction between Section 73 and Section 74 of the CGST Act, focusing on when each applies. Section 74 is invoked for cases involving fraud, misstatement, or wilful suppression of facts, while Section 73 covers non-fraud situations like tax short-payment or erroneous refunds. The procedure involves issuing a Notice in Form DRC-01, with differing time limits for issuing these notices based on whether the case is fraudulent or not.

Pankaj Rawat

GST Practitioner

55067 Points Posted on 09 February 2020

As per Section 73 & 74 of CGST :
The proper Officer may serve SCN to person due to any of following reasons
1. Tax not paid/short paid
2. Tax Erroneously refunded
3. Input credit wrongly availed or utilized.

The only difference between 73 & 74 is Section 74 invokes when the taxpayer by means of FRAUD ,MISTATEMNT, SUPPRESSION BY WILFUL indulge any of above mentioned condition.
And Section 73 is applies to NON FRAUD cases .

Procedure : In term of Rule 142 of CGST Act The proper Officer Issue Notice in Form DRC 01 mentioned Tax Period, FY & Taxes & penalty therein .

SCN in DRC 01 can be issue in case of Bona fide defaulter (Non fraud) with in 2 years + 9 months from the due date of file annual Return & in case of Mala-fide defaulter (Fraud) it's 4year + 6 months .

for more details kindly refer Rule 142 in this regard