In the context of Goods and Services Tax (GST) in India, adhering to the specified time limits for the issuance of Show Cause Notices (SCNs) and adjudication orders is critical for compliance. This article delves into the provisions under Sections 73 and 74 of the Central Goods and Services Tax (CGST) Act, 2017, focusing on the deadlines for the financial years (FY) 2017-18, 2018-19, 2019-20, and 2020-21. It also highlights recent extensions provided by the Central Board of Indirect Taxes and Customs (CBIC).
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Time Limit for issuance of SCN [Section 73(2) of the CGST Act, 2017]
The SCN required to be issued under section 73(1) shall be issued by proper officer as per time limit given in sub-section (10) of Section 73 i.e., three months before issuance of the time limit for issuance of order. The date of issuance of SCN is depend on the due date of passing of the order under section 73(10). The proper officer shall issue SCN at least 3 months prior to the time limit of 3 years for issuance of order i.e.
- Before completion of 3 years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to, or
- Within 3 years from the date of erroneous refund, as the case may be.
Thus, the time-limit for issuance of SCN in non-fraud or non – suppression cases is 2 years and 9 months from the due date of filing Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund.
Checking the validity of SCN(s)- ‘Limitation Date’
Section 73(2) of the CGST Act, 2017 specifies that a SCN should be issued at least three months prior to the issuance of an adjudication order. CBIC in exercise of its powers u/s 168A of the CGST Act, 2017 vide Notification No. 09/2023-CT dated 31.03.2023 has extended the time limit for issuance of adjudication order for FY 2017-18, 2018-19 and 2019-20 pertaining to non-fraud cases under 73(9) of CGST Act, 2017. However, the time limit has been further extended by Notification No. 56/2023-CT dated 28.12.2023 for the FY 2018-19 and FY 2019-20.
| Particulars | FY 2017-18 | FY 2018-19 | FY 2019-20 | FY 2020-21 |
| SCN
Extended deadline to issue a notice under section 73(2) of the CGST Act. |
30th September, 2023 | 31st January, 2024 | 31st May, 2024 | 30th November, 2024 |
| ORDER
Extended deadline to issue a notice under section 73(10) of the CGST Act. |
31st December, 2023 | 30th April, 2024 | 31st August, 2024 | 28th February, 2025 |
Time Limit for issuance of SCN [Section 74(2) of the CGST Act, 2017]
The SCN required to be issued under section 74(1) shall be issued by proper officer as per time limit given in sub-section (10) of Section 74 i.e., six months before issuance of the time limit for issuance of order. The date of issuance of SCN is depend on the due date of passing of the order under section 74(10). The proper officer shall issue SCN at least 6 months prior to the time limit of 5 years for issuance of order i.e.
- Before completion of 5 years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to, or
- Within 5 years from the date of erroneous refund, as the case may be.
Thus, the time-limit for issuance of SCN is 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund.
Checking the validity of SCN(s)- ‘Limitation Date’
Section 74(2) of the CGST Act, 2017 specifies that a SCN should be issued at least six months prior to the issuance of an adjudication order. Moreover, the time-limit for issuance of SCN is 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund. The due date of filing of Annual Return for FY 2017-18, 2018-19, 2019-20 and 2020-21 are as under-
| FY | Due date of GSTR 9 & 9C |
| 2017-18 | 5th and 7th February, 2020 |
| 2018-19 | 31st December, 2020 |
| 2019-20 | 31st March, 2021 |
| 2020-21 | 28th February, 2022 |
In view of the extended date of filing of Annual Return, the time lime to issue SCN and adjudication order under section 74 are as under-
| Particulars | FY 2017-18 | FY 2018-19 | FY 2019-20 | FY 2020-21 |
| SCN
Deadline to issue a notice under section 74(2) of the CGST Act. |
5th August, 2024 | 30th June, 2025 | 30th September, 2025 | 31st August, 2026 |
| ORDER
Prescribed date to issue a notice under section 74(10) of the CGST Act. |
5th February, 2025 | 31st December, 2025 | 31st March, 2026 | 28th February, 2027 |
Conclusion: Compliance with the time limits for issuing SCNs and adjudication orders under Sections 73 and 74 of the CGST Act is crucial for avoiding legal complications and ensuring smooth tax administration. The extensions provided by the CBIC offer necessary relief but require careful attention to updated deadlines. Staying informed about these changes helps in maintaining compliance and mitigating risks associated with delayed notices and orders.
FAQs – Time Limits for SCNs and Adjudication Orders under Sections 73 & 74 of the GST Act
Q1. What is the time limit for issuing a Show Cause Notice (SCN) under Section 73 of the CGST Act?
Answer: Under Section 73(2), the proper officer must issue the SCN at least three months before the prescribed deadline for passing the adjudication order. Generally, this means the SCN should be issued within 2 years and 9 months from the due date for filing the annual return for the relevant financial year or within the applicable period from the date of an erroneous refund.
Q2. How do the time limits under Section 74 differ from those under Section 73?
Answer: Section 74 applies to cases involving fraud, wilful misstatement, or suppression of facts. In such cases, the SCN must be issued at least six months before the adjudication order, and the order can generally be passed within five years from the relevant due date. Accordingly, the SCN is typically required to be issued within 4 years and 6 months from the applicable due date.
Q3. Were the deadlines for issuing SCNs and adjudication orders under Section 73 extended for certain financial years?
Answer: Yes. The CBIC extended the time limits for issuing adjudication orders under Section 73 for FY 2017-18, FY 2018-19, and FY 2019-20 through Notifications No. 09/2023-CT and 56/2023-CT. Consequently, the corresponding deadlines for issuing SCNs were also extended for these financial years.
Q4. Why is it important to verify the limitation period for an SCN?
Answer: Verifying the limitation period helps determine whether an SCN has been issued within the statutory time limits prescribed under the CGST Act. An SCN issued beyond the applicable limitation period may be open to challenge on the ground of being time-barred.
Q5. What should taxpayers do to ensure compliance with the revised GST timelines?
Answer: Taxpayers should monitor the applicable limitation periods for their relevant financial years, take note of any CBIC notifications extending statutory deadlines, preserve supporting records, and review any SCNs or adjudication orders received to ensure they have been issued within the prescribed time limits under Sections 73 or 74 of the CGST Act.
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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
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