GST Limitation Guide: Section 73, 74 & 74A Timelines for SCNs, Orders & Record Retention

Summary: The article explains the limitation periods under the GST law for issuance of Show Cause Notices (SCNs), passing of orders, and retention of books of account. For cases not involving fraud under Section 73, SCNs must be issued at least three months before the order, and orders must be passed within three years from the due date of GSTR-9, with FY-wise timelines provided for FY 2020-21 to FY 2023-24. For fraud or wilful misstatement under Section 74, SCNs must be issued at least six months before the order, and orders must be passed within five years from the due date of GSTR-9, with separate timelines for FY 2020-21 to FY 2023-24. From FY 2024-25, Section 74A replaces Sections 73 and 74, prescribing a unified limitation of 42 months from the GSTR-9 due date for issuing SCNs and 12 months from the SCN date for passing orders, extendable by six months. The article also states that books of account must generally be retained for 72 months from the GSTR-9 due date, subject to specified exceptions, and highlights special provisions relating to Section 63 assessments, tax collected but not paid, erroneous refunds, and court stays.

Introduction: The GST law prescribes strict timelines for the tax department to issue Show Cause Notices (SCN) and pass final Orders, and for taxpayers to retain books. Missing these timelines means the demand becomes “time barred”. With the introduction of Section 74A from FY 2024-25, the limitation structure has changed significantly. Here’s a detailed breakdown based on the latest chart published Aug-26.

1. Section 73: For Cases NOT Involving Fraud/Wilful Misstatement

This is for normal errors, mismatches, and short payments where there is no intention to evade tax.

Limitation:

– SCN Deadline: Must be issued at least 3 months before the order date

– Order Deadline: Must be passed within 3 Years from the due date of filing GSTR-9 for that FY

FY-wise Key Dates:

Note: Dates for FY 17-18 to 19-20 have been extended via NN 56-2023 CT dated 28-12-2023

2. Section 74: For Cases Involving Fraud/Wilful Misstatement

This applies where there is suppression, fraud, or wilful misstatement to evade tax.

Limitation:

– SCN Deadline: Must be issued at least 6 months before the order date

– Order Deadline: Must be passed within 5 Years from the due date of filing GSTR-9 for that FY

FY-wise Key Dates:

Special Note for URD Assessment u/s 63: The order deadline remains same as Section 74, but SCN can be issued just 15 days prior to the order date.

3. Section 74A: New Merged Provision

From FY 2024-25, Section 73 and 74 have been merged into Section 74A. Now there is no separate distinction between fraud and non-fraud at the time of SCN.

Limitation:

– SCN Deadline: Within 42 Months from the due date of GSTR-9

– Order Deadline: Within 12 Months from the date of SCN

– Extension: The 12-month period for passing order can be extended by another  6 months by Commissioner/Additional/Joint Commissioner

FY-wise Key Dates:

This reduces the overall litigation window and brings faster closure.

4. Section 36: Retention of Books of Accounts

Every registered taxpayer must retain books, records, and invoices for 72 months = 6 years from the due date of filing GSTR-9 for that FY.

Important Exception: If there is any appeal/revision/investigation/proceeding pending, books must be retained for 1 year after final disposal or the original 6-year period, whichever is later.

5. Other Critical Exceptions to Remember

1.  Section 76: If tax is collected but not paid to government there is No Time Limit for issuance of SCN/Order.

2. Erroneous Refund: For recovery of erroneous refund, the 3/5/42 month period will be counted from the date of Refund Order, not GSTR-9 due date.

3. Court Stay: Any period during which SCN/Order is stayed by Court or Tribunal will be excluded from calculating limitation.

Key Takeaways for Businesses:

1. FY 2020-21: Last chance for Section 73 Order is 28-Feb-2025. Section 74 SCN can still come till 31-Aug-2026.

2. FY 2024-25 Onwards: Track 42-month SCN timeline under 74A. Department has to act faster.

3. Record Keeping: Don’t destroy FY 2017-18 records before 05-Feb-2026.

4. Compliance: Reconcile GSTR-1, 3B and 2B now itself to avoid SCN in the last months of limitation.

Conclusion:

The GST limitation timelines are not just procedural dates — they directly impact a taxpayer’s liability and the department’s power to raise demands.

With Section 74A coming into effect from FY 2024-25, the government has merged fraud and non-fraud cases into a single 42-month + 12-month timeline. This aims to bring faster closure, reduce prolonged litigation, and give more certainty to businesses. At the same time, older years under Section 73 and 74 are still active, and the department is expected to be most active in the last 6 months before each deadline.

 In short, limitation periods give taxpayers a legal shield, but only if compliance and documentation are in place. Waiting till the last date increases risk. Early review and correction is the safest approach to avoid time-barred disputes turning into real tax demands.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Stakeholders should refer to the official GSTN Advisory and consult their tax advisor for specific situations.