From financial year 2024-25, GST demands for tax not paid, short paid, wrongly refunded or ITC wrongly availed are raised under a single section, 74A, instead of separate sections 73 and 74. The notice states whether fraud, wilful misstatement or suppression is alleged, and that choice drives the penalty and your best response.
Where fraud or suppression is not alleged, penalty is 10 percent of tax or Rs. 10,000, whichever is higher. If you pay the tax with interest within 60 days of the notice, no penalty is payable and proceedings close. Where fraud, wilful misstatement or suppression is alleged, penalty equals the tax, reduced to 15 percent if paid before the notice, 25 percent if paid within 60 days of the notice, and 50 percent if paid within 60 days of the order.
Do not treat a 74A notice like an old section 73 notice; the payment window is 60 days, not 30. Do not accept the fraud tag casually, because it raises penalty exposure considerably. For periods up to FY 2023-24, the older sections 73 and 74 still apply, so a notice for those years under 74A should be examined carefully.
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This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.
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