What is the difference between Section 73 and 74 of GST?
Asked by: Prof. Ellen Schaefer MD | Last update: March 10, 2026Score: 4.7/5 (31 votes)
The key difference between GST Sections 73 and 74 lies in the reason for tax short-payment/wrong ITC; Section 73 covers cases without fraud, wilful misstatement, or suppression (unintentional errors), while Section 74 applies with these elements (deliberate evasion). This distinction drastically changes the penalty structure, with Section 74 carrying much higher penalties (up to 100% of tax) compared to Section 73 (around 10%), reflecting the law's approach to honest mistakes versus deliberate tax evasion, with Section 74 also having extended time limits.
What is the difference between Section 73 and 74 of the GST Act?
Section 73 applies to any tax liability when there is no suspicion of fraud, wilful misstatement or suppression of facts. Section 74 applies to a tax liability only when there is a suspicion of fraud, wilful misstatement or suppression of facts.
What is the difference between Section 73 and 74 of the Indian Contract Act?
Section 73 deals with general compensation where there's no pre-fixed amount. Section 74 kicks in when the contract itself sets out the sum payable in case of breach — like a penalty or liquidated damages.
What is Section 73 of the GST Act?
Scope of Section 73: Section 73 applies to cases of unintentional non-payment or short payment of GST. Lower Penalties: Penalties under Section 73 are lower compared to Section 74. Voluntary Payment Benefit: Voluntary tax payment before issuance of a SCN significantly reduces penalties.
What is Section 74 of the GST Act?
(1)Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which ...
Section 73 Vs 74 in GST | What are the Key Differences | Podcast
What is the time limit for Section 74 GST notice?
2. Section 74: Demand Notice for Fraud Cases. This section covers cases where there is fraud, suppression, or misrepresentation of facts. – Time limit to issue notice: 5 years from the due date of filing annual return.
What is the time limit for issuing a notice under section 73?
Section 73 of the CGST Act Time Limit
The newly added Section 74A prescribes clear time limits as follows: The notice should be issued within 42 months of: the last day of filing the annual return or. The erroneous refund.
What is the time limit for Section 73 of GST?
Section 73(10) of the CGST Act requires the proper officer to issue order under Section 73(9) within three years from the due date for furnishing of relevant annual return.
What are the latest updates on section 73?
Effective September 18, 2022, Senate Bill 1340 (Stats. 2022, ch. 425) amends section 73 to extend the new construction exclusion for active solar energy systems from 2023-24 to the 2025-26 fiscal year and changes the repeal date from January 1, 2025, to January 1, 2027.
Who is exempt from 1% cash payment in GST?
The following category of tax persons are exempted from payment of 1% of GST in Cash 1. Registered taxpayers who have paid income tax above Rs 1.00 in Income Tax during the last two years continuously 2. Taxpayers who have zero-rated supplies without payment of duty and claimed refund of more than Rs 1.00 lac 3.
What damages are covered under section 73?
Section 73 of the ICA provides as follows: When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has committed breach, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the ...
What is Section 74 of the Indian Contract Act?
-- A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested. (a) A contracts with B to pay B Rs. 1,000, if he fails to pay B Rs. 500 on a given day.
What is Section 73 of the Indian Contract Act?
73. Compensation for loss or damage caused by breach of contract. Compensation for failure to discharge obligation resembling those created by contract.
What is the difference between Section 73 and 74 of the Contract Act?
Section 73: The amount of damages is assessed by the court based on the actual loss or injury suffered by the non-breaching party. The purpose is to compensate the injured party for the actual loss suffered. Section 74: The amount of damages is predetermined and specified in the contract.
What is the penalty under Section 74 A of GST?
Section 74A(5) - Penalty
74A(5)(i) - 10% of the tax due or Rs. 10,000, whichever is higher. 74A(5)(ii) - Equivalent to the amount of tax due.
What are common disputes under section 74?
Section 74 of the CGST Act deals with cases where tax has not been paid, wrongly refunded, or ITC has been wrongly claimed with the intention to evade tax. It empowers the GST department to issue a demand notice and initiate proceedings in matters involving fraud or deliberate misstatement.
What is a Section 73 policy?
Section 73 CATCA 2003 provides for a similar exemption for the proceeds of certain insurance policies taken out specifically to pay CAT on gifts or inheritances arising on future gifts made by the insured person during his or her lifetime.
What is section 73?
Sec 73-Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful- misstatement or suppression of facts.
What is Amendment 79 Arkansas property tax exemption for seniors?
What is Amendment 79? Amendment 79 provides up to a $600 tax credit on your principal place of residence and limits how much the assessed value can increase.
What is the difference between section 73 and 74?
Section 73 deals with "Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful-misstatement or suppression of facts" and Section 74 deals with "Determination of tax not paid or short paid or erroneously refunded or ...
What is the GST amnesty scheme for Section 73?
Avail the new GST Amnesty Scheme 2024, introduced via Section 128A for conditional waiver of interest and penalties for tax demands from FY 2017-18 to 2019-20 under Section 73. To qualify, taxpayers must fully pay outstanding tax dues by March 31, 2025.
Is Section 74 of GST extended limitation?
Under Section 74(10) of the Central Goods and Services Tax Act, 2017 (the CGST Act), tax authorities may invoke an extended five-year period from the annual return filing date if these 'ingredients' exist, while the normal period is three years from the annual return filing date.
What is the last date for Section 74?
This article discusses show cause notice under section 74 of the CGST Act, its applicability, consequences and many more. Stay with us. The last date to issue Show Cause Notices (SCN) under Section 74 (for FY 2019-20) and Section 73 (for FY 2021-22) is 30th September 2025.
Can GST penalty be waived off?
If there is an amnesty announced by the government for the default, then the GST penalty could be conditionally waived off.
What is Section 74 of the GST case law?
Applicability of Section 74: Section 74 of the CGST Act applies where tax has not been paid or has been short-paid or input tax credit has been wrongly availed or utilized, by reason of fraud or willful misstatement or suppression of facts to evade tax.