The Finance Act, 2024 inserted Section 74A into the CGST Act. For tax periods from FY 2024-25 onwards, it replaces both Section 73 (non-fraud) and Section 74 (fraud) with a single provision. Notices for FY 2023-24 and earlier still use Sections 73 and 74.
Time limits
| Section 73 (up to FY 23-24) | Section 74 (up to FY 23-24) | Section 74A (FY 24-25 onwards) | |
|---|---|---|---|
| Notice | 3 months before the order deadline | 6 months before the order deadline | Within 42 months of the annual return due date |
| Order | 3 years from annual return due date | 5 years | Within 12 months of the notice (extendable by 6 months) |
For FY 2024-25, the annual return (GSTR-9) was due on 31 December 2025, so a Section 74A notice can be issued until about 30 June 2029.
Penalties under 74A
Non-fraud cases (sub-section 5(i)): penalty of 10% of tax or ₹10,000, whichever is higher. No penalty if you pay the tax and interest within 60 days of the notice.
Fraud, wilful misstatement or suppression (sub-section 5(ii)): penalty equal to 100% of the tax, reduced if you pay early:
- before the notice: 15%
- within 60 days of the notice: 25%
- within 60 days of the order: 50%
How to respond
- Check whether the officer has invoked fraud / suppression and whether the facts actually support it - the burden is on the department.
- Check the time limit - a notice issued after 42 months is time-barred.
- Reply in DRC-06 with point-wise rebuttal, documents and case law if relevant, and ask for a personal hearing (Section 75(4)).
- If part of the demand is correct, pay that part with interest within 60 days to avoid penalty on it.
Appeal
Against an order, appeal under Section 107 within 3 months, with a pre-deposit of 10% of the disputed tax (capped at ₹20 crore).
Draft your DRC-06 reply with Notisaar - it identifies whether 73, 74 or 74A applies from the tax period in your notice.