Text
The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.
Section 74, verbatim (show)
Section 74
*Section 74. Determination of tax 2[, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful- misstatement or suppression of facts.-
(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 has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a period of five 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 utilised relates to or within five years from the date of erroneous refund.
(11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded.
2[(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.]
Explanation 1.- For the purposes of section 73 and this section,-
(i) the expression "all proceedings in respect of the said notice" shall not include proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under 1[sections 122 and 125] are deemed to be concluded.
Explanation 2.- For the purposes of this Act, the expression "suppression" shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.
*Enforced w.e.f. 1st July, 2017.
1. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 113 of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for "sections 122, 125, 129 and 130".
2. Inserted by section 137 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
74(1)Fraud-related notice
he shall serve notice on the person chargeable with taxSection 74(1)
The defaults must arise from fraud, wilful misstatement or suppression to evade tax. Notice includes section 50 interest and penalty equal to the stated tax. Section 62 applies notwithstanding section 74 to its assessment route.
Questions to answer on the fileWhat the officer says has gone wrong6 questions
Questions to answer on the fileThe reason: fraud, wilful-misstatement or suppression of facts4 questions
Questions to answer on the fileThe notice and what it must require6 questions
74(2)Notice lead time
at least six months prior to the time limit specified in sub-section (10) for issuance of order.Section 74(2)
The order deadline fixes the latest notice timing. Sub-section (10) uses the stated five-year calculation.
Questions to answer on the file1 question
74(3) and (4)Other periods
shall be deemed to be service of notice under sub-section (1) of section 73Section 74(3) and (4)
A prior notice and statement for other periods are required. The grounds must match except the stated fraud-related ground. The law does not settle the test of "the same" grounds.
Questions to answer on the file4 questions
74(5)Pre-notice payment
a penalty equivalent to fifteen per cent. of such taxSection 74(5)
The person pays tax, section 50 interest and the reduced penalty before notice, using own or officer ascertainment. Written intimation links the payment to sub-section (6).
Questions to answer on the file7 questions
74(6)Protection for paid amount
shall not serve any notice under sub-section (1), in respect of the tax so paidSection 74(6)
The officer receives the sub-section (5) payment information. The notice restriction covers the paid tax and penalty, subject to shortfall notice under sub-section (7).
74(7)Shortfall
he shall proceed to issue the notice as provided for in sub-section (1)Section 74(7)
The officer must consider the pre-notice payment short of the amount required. Notice concerns that shortfall.
74(8)Notice-stage payment
a penalty equivalent to twenty-five per cent. of such tax within thirty days of issue of the noticeSection 74(8)
Tax and section 50 interest accompany the penalty. Timely payment concludes the notice proceedings, subject to Explanation 1's criminal-proceedings exclusion.
Questions to answer on the file5 questions
74(9)Determination
determine the amount of tax, interest and penalty due from such person and issue an order.Section 74(9)
The officer first considers any representation. The order is subject to the sub-section (10) period.
Questions to answer on the file8 questions
74(10)Order deadline
within a period of five years from the due date for furnishing of annual returnSection 74(10)
Ordinary tax and credit cases use the relevant financial-year annual-return due date; erroneous refund uses five years from refund. The law does not settle the start where an annual return is not required.
74(11)Order-stage payment
a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the orderSection 74(11)
Tax and section 50 interest must also be paid. The resulting notice closure retains the section 132 exclusion in Explanation 1.
Questions to answer on the file7 questions
74(12)Financial-year reach
shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.Section 74(12)
The heading carries the same boundary, and section 74A deals with Financial Year 2024-25 onward. Footnote 2 gives no commencement date for these insertions, and the law does not settle their reach to earlier notices or orders.
Questions to answer on the file2 questions
74, Explanation 1(i) and (ii)Extent of closure
shall not include proceedings under section 132Section 74, Explanation 1(i) and (ii)
For sections 73 and 74, closure preserves section 132 proceedings. Where the main person's proceedings conclude and others were noticed in the same proceedings, the specified sections 122 and 125 penalties against those persons are deemed concluded.
74, Explanation 2Suppression
the expression "suppression" shall mean non-declaration of facts or informationSection 74, Explanation 2
Required disclosures in returns, statements, reports or other statutory documents fall within the definition. Failure to furnish information requested in writing by the proper officer also falls within it.
Other questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.
Scope the section as a whole
Questions to answer on the file1 question
What "all proceedings" reaches, and the other persons Explanation 1
Questions to answer on the file5 questions
Frequently asked questions
Does payment before notice require penalty?
Yes. The route requires tax, interest and fifteen per cent. penalty, with written intimation. Protection concerns the amount paid, with shortfalls open to notice.
Section 74(5) to (7)
Does notice closure also close prosecution under section 132?
No. Explanation 1 expressly excludes section 132 proceedings from the closure expression.
Section 74, Explanation 1(i)
What starts the five years where no annual return is required?
The law does not settle that starting date. Sub-section (10) uses the annual-return due date for the ordinary tax and credit cases.
Section 74(10)
Amendment history
The CBIC text carries 3 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change | Instrument | Effective from |
|---|---|---|---|
| Enforced the section. | — | 1st July, 2017 | |
| 1 | Substituted "sections 122 and 125" for "sections 122, 125, 129 and 130" in Explanation 1(ii). | s. 113 of The Finance Act, 2021 (No. 13 of 2021), dated 28th March, 2021[2] | 1st January, 2022 |
| 2 | Inserted the words ", pertaining to the period up to Financial Year 2023-24," in the heading, and inserted sub-section (12). | section 137 of The Finance Act (No. 2) Act, 2024, No. 15 of 2024, dated 16.08.2024[3] | the source's footnote gives no effective date for the insertion; the date shown is the date of the amending Act |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 50 | this provision requires Section 50 | 74(1) "along with interest payable thereon under section 50" |
| Section 73 | 74(4) same as Section 73 sub-section (1) | 74(4) "shall be deemed to be service of notice under sub-section (1) of section 73" |
| Section 44 | 74(10) requires Section 44 | 74(10) "within a period of five years from the due date for furnishing of annual return for the financial year" |
| Section 73 | Explanation 1 same as Section 73 | Explanation 1 "For the purposes of section 73 and this section" |
| Section 132 | Explanation 1(i) exception in Section 132 | Explanation 1(i) "shall not include proceedings under section 132" |
| Section 122 | Explanation 1(ii) requires Section 122, S125 | Explanation 1(ii) "the proceedings against all the persons liable to pay penalty under 1[sections 122 and 125] are deemed to be concluded" |
| Section 62 | this provision overridden by Section 62 | 62(1) "Notwithstanding anything to the contrary contained in section 73 or section 74" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (13)
| Number | Date | Subject |
|---|---|---|
| Circular No. 254/11/2025-GST | 27 October 2025 | Assigning proper officer under section 74A, section 75(2) and section 122 of the Central Goods and Services Tax Act, 2017 |
| Circular No. 237/31/2024-GST | 15 October 2024 | Clarifying the issues regarding implementation of provisions of sub-section (5) and sub-section (6) in section 16 of CGST Act,2017. |
| Circular No. 238/32/2024-GST | 15 October 2024 | Clarification of various doubts related to Section 128A of the CGST Act, 2017. amended by a later instrument |
| Circular No. 224/18/2024-GST | 11 July 2024 | Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation. |
| Circular No. 185/17/2022-GST | 27 December 2022 | Clarification with regard to applicability of provisions of section 75(2) of Central Goods and Services Tax Act, 2017 and its effect on limitation |
| Circular No. 178/10/2022-GST | 3 August 2022 | GST applicability on liquidated damages, compensation and penalty arising out of breach of contract or other provisions of law |
| Circular No. 171/03/2022-GST | 6 July 2022 | Clarification on various issues relating to applicability of demand and penalty provisions under the Central Goods and Services Tax Act, 2017 in respect of transactions involving fake invoices. |
| Circular No. 125/44/2019-GST | 18 November 2019 | Seeks to clarify the fully electronic refund process through FORM GST RFD-01 and single disbursement. amended by a later instrument |
| Circular No. 106/25/2019-GST | 29 June 2019 | Refund of taxes paid on inward supply of indigenous goods by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange - reg. withdrawn by a later instrument |
| Circular No. 77/51/2018-GST | 31 December 2018 | Denial of composition option by tax authorities and effective date thereof |
| Circular No. 59/33/2018-GST | 4 September 2018 | Clarification on refund related issues. Rescinded vide Circular No. 125/44/2019 - GST dated 18.11.2019. rescinded by a later instrument |
| Circular No. 31/05/2018-GST | 9 February 2018 | Proper officer under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 and under the Integrated Goods and Services Tax Act, 2017. amended by a later instrument |
| Circular No. 3/03/2017-GST | 5 July 2017 | Proper officer relating to provisions other than Registration and Composition under the Central Goods and Services Tax Act, 2017-Reg. |
Notifications (11)
| Number | Date | Subject |
|---|---|---|
| Notification No. 20/2024-Central Tax | 8 October 2024 | Seeks to make amendments (Second Amendment 2024) to the CGST Rules, 2017 |
| Notification No. 21/2024-Central Tax | 8 October 2024 | Seeks to notify date under sub-section (1) of Section 128A of CGST Act. |
| Notification No. 22/2024-Central Tax | 8 October 2024 | Seeks to notify the special procedure under section 148 of the CGST Act for rectification of demand orders issued for contravention of section 16(4) of the said Act. |
| Notification No. 12/2024-Central Tax | 10 July 2024 | Seeks to make amendments (Amendment, 2024) to the CGST Rules, 2017. |
| Notification No. 38/2023-Central Tax | 4 August 2023 | Seeks to make amendments (Second Amendment , 2023) to the CGST Rules, 2017. |
| Notification No. 14/2022-Central Tax | 5 July 2022 | Seeks to make amendments (First Amendment, 2022) to the CGST Rules, 2017 |
| Notification No. 49/2019-Central Tax | 9 October 2019 | Seeks to carry out changes in the CGST Rules, 2017. |
| Notification No. 16/2019-Central Tax | 29 March 2019 | Seeks to make Second Amendment (2019) to CGST Rules. |
| Notification No. 74/2018-Central Tax | 31 December 2018 | Fourteenth amendment to the CGST Rules, 2017. amended by a later instrument |
| Notification No. 15/2017-Central Tax | 1 July 2017 | Amending CGST Rules notification 10/2017-CT dt 28.06.2017 |
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
Unsettled questions
The words of section 74 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.
- From what date does the limit of this section to the determination of tax pertaining to the period up to Financial Year 2023-24, inserted in the heading and as sub-section (12) by section 137 of the Finance (No. 2) Act, 2024, apply, and does it reach a notice or an order made before that insertion? The source's footnote gives the amending Act and its date of 16.08.2024 and no commencement date.
- What makes the grounds relied upon in a statement under sub-section (3) "the same as are mentioned in the earlier notice": the same facts, the same provision relied on, the same transactions, or all three? Sub-section (4) makes the deeming turn on sameness and gives no test of it.
- From what date do the five years run where the person is not required to furnish an annual return for the financial year? Sub-section (10) fixes the starting point only as "the due date for furnishing of annual return", and section 44 exempts some classes of person from furnishing it.
See also
- Section 73 of the CGST Act, 2017: 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 willful-misstatement or suppression of facts
- Section 74A of the CGST Act, 2017: determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward
- Section 75 of the CGST Act, 2017: general provisions relating to determination of tax
- Section 62 of the CGST Act, 2017: assessment of non-filers of returns
- Section 50 of the CGST Act, 2017: interest on delayed payment of tax
- Section 132 of the CGST Act, 2017: punishment for certain offences
References
- Central Board of Indirect Taxes and Customs. "Section 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 3. Retrieved 17 September 2026.
- The Finance Act, 2021. Cited in CBIC footnote 1.
- The Finance Act (No. 2) Act, 2024. Cited in CBIC footnote 2.
External links
- CGST Act, 2017, Section 74 on the CBIC tax information portal