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Explore the distinctions between GST Adjudication under Section 73 and Section 74, including meanings, limitations, penalties, forms, and procedural details. Understand the nuances to ensure effective compliance in the complex GST framework.

Introduction: Adjudication plays a pivotal role in the GST framework, providing a formal decision-making process for tax-related issues. Two crucial sections, 73 and 74, delineate the circumstances, procedures, and consequences associated with demand determination.

Adjudication of Demand under CGST Act,2017

Adjudication means the act of judging a case, competition, or argument, or of making a formal decision about something.

Basic Points of Section 73 & Section 74 of CGST Act, 2017

Particular

Section 73

Section 74

Meaning Reasons other than

  • Fraud
  • Willful Statement
  • Suppression of facts
By Reason of

  • Fraud
  • Willful Statement
  • Suppression of facts
Limitation for issue of SCN 3 months prior to time limit of order 6 months prior to time limit of order
Limitation for issue of order Within 3 years from date of submission of annual return Within 5 years from date of submission of annual return
Penalty before issue of SCN Nil 15%
Penalty within 30 days after issue of SCN Nil 25%
Penalty within 30 days of issue of order 10% of tax or Rs. 10000 (whichever is higher) 50%
Penalty after 30 days of issue of Order 10% of tax or Rs. 10000 (whichever is higher) 100%

Details of GST Forms & to which it is related 

Forms

Relating to

GST DRC-01A Intimation of tax ascertained as being payable under section 73(5)  or 74(5)
GST DRC-01 Summary of SCN
GST DRC-02 Summary of Statement
GST DRC-03 Intimation of payment made voluntarily or made against DRC-01A, DRC-01 or DRC-02
GST DRC-04 Acknowledgement of acceptance of payment made voluntarily
GST DRC-05 Intimation of conclusion of proceedings
GST DRC-06 Reply to SCN (GST DRC-01)
GST DRC-07 Summary of Order
GST DRC-08 Summary of Rectification/ Withdrawal Order

Details of Monetary Limit of the amount of Tax for issuance of Notice

Officer of Central Tax

Monetary limit of the amount of central tax (including cess) for issuance of show cause notices and passing of orders under sections 73 and 74 of CGST Act Monetary limit of the amount of integrated tax (including cess) for issuance of show cause notices and passing of orders under sections 73 and 74 Monetary limit of the amount of central tax and integrated tax (including cess) for issuance of show cause notices and passing of orders under sections 73 and 74 of CGST Act made applicable to integrated tax

Superintendent of Central Tax

Not exceeding Rupees 10 lakhs Not exceeding Rupees 20 lakhs Not exceeding Rupees 20 lakhs
Deputy or Assistant Commissioner of Central Tax Above Rupees 10 lakhs and not exceeding Rupees 1 crore Above Rupees 20 lakhs and not exceeding Rupees 2 crores Above Rupees 20 lakhs and not exceeding Rupees 2 crores
Additional or Joint Commissioner of Central Tax Above Rupees 1 crore without any limit Above Rupees 2 crores without any limit Above Rupees 2 crores without any limit

Details of Sub Section of Section 73

Section

Particular

73(1) Circumstances for determination of demand
73(2) Issuance of notice (time period prior)
73(3) Issue of statement
73(4) Statement deemed to be Notice
73(5) Voluntary Payment Prior to notice
73(6) No notice to be issued (if 73(5) is done)
73(7) Notice to be issued for shortfall amount (SCN)
73(8) No penalty if amount paid within 30 days of issue of SCN
73(9) Issuance of Order
73(10) Time limit for order
73(11) Levy of Penalty

Details of Sub Section of Section 74

Section

Particular

74(1) Circumstances for determination of demand
74(2) Issuance of notice (time period prior)
74(3) Issue of statement
74(4) Statement deemed to be Notice
74(5) Voluntary Payment Prior to notice
74(6) No notice to be issued (if 74(5) is done)
74(7) Notice to be issued for shortfall amount (SCN)
74(8) Consequences of amount paid after SCN
74(9) Issuance of Order
74(10) Time limit for order
74(11) Deemed Conclusion

Conclusion: Navigating the complexities of GST adjudication requires a comprehensive understanding of Sections 73 and 74. The meticulous analysis reveals the intricacies of demand determination, penalties, and procedural aspects. Stakeholders in the GST domain can use this knowledge to ensure compliance and navigate the adjudication process effectively.

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Author Bio

My self Manoj Katarmal practicing Direct and Indirect Tax since 2007 View Full Profile

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

2 Comments

  1. SUDARSHAN KUMAR says:

    Query regarding monetary limit:

    If demand of CGST of Rs. 12,00,000/- and IGST of Rs. 7,00,000/- (total demand of Rs. 19,00,000/-), who will be the proper officer to issue show cause notice ?

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