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A GST notice in India can involve a time limit to issue the notice, a separate deadline to pass an order, interest on unpaid tax and penalties that depend on the financial year and the legal section cited. The first step is to identify the tax period and whether the notice invokes section 73, 74 or 74A of the Central Goods and Services Tax Act (CGST Act). For periods through FY 2023-24, sections 73 and 74 distinguish cases without and with alleged fraud or suppression; section 74A applies to demands relating to FY 2024-25 onward. The payment windows and consequences differ, so do not calculate a deadline or choose a payment route from the notice date alone.
This is a general guide to the central CGST framework, not a decision about any particular notice. State GST and integrated GST provisions, state-specific instruments, service dates, statutory exclusions and case history can affect the analysis.
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What should I check first when I receive a GST notice?
Start by preserving the complete notice, its attachments and proof of when and how it was served. Then identify the financial year, the section cited, the type of demand, the deadline to respond and whether the document is a show-cause notice, an adjudication order or a recovery notice. These are not interchangeable documents, and the label and procedural stage matter.
- Find the period and tax type. Note each financial year and whether the issue concerns tax not paid or short paid, an erroneous refund, or input tax credit (ITC) allegedly wrongly availed or utilised. If the notice spans several years, assess each year separately.
- Read the section and stated grounds. Sections 73 and 74 govern the older periods through FY 2023-24. Section 73 concerns the specified demand for reasons other than fraud, wilful misstatement or suppression of facts to evade tax. Section 74 concerns those stated grounds. For FY 2024-25 onward, section 74A provides the demand route for any reason, with different penalty outcomes depending on whether the specified fraud-related grounds apply.
- Write down every relevant date. Record the annual-return due date for the year, the date of any erroneous refund, notice issue and service dates, the reply deadline, hearing date, and any order date or payment already made. The legal trigger is not necessarily the date you opened or read the notice.
- Reconcile the figures. Separate principal tax, interest and penalty. Check the department’s period-by-period calculation against returns, invoices, ITC records, refund records and payment evidence. Interest depends on the amount and the dates the tax remained unpaid.
- Decide whether to reply, pay, or do both. A payment route may reduce or remove a penalty in qualifying cases, but its deadline and effect depend on the section and procedural stage. Keep any response and payment evidence, and verify the applicable portal process.
The consolidated CGST Act on India Code is the preferred starting point for the current central statutory text. An allegation in a notice is not itself a finding that the allegation is true.
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How do GST notice time limits work?
Limitation is not determined from the notice date alone. For sections 73 and 74, the Act sets an outer period for the order measured from the annual-return due date for the relevant financial year, or from the date of an erroneous refund. The notice must be issued a specified number of months before that order deadline. Section 74A uses a different, direct notice deadline and a separate order period.
For any live calculation, establish the correct period and statutory trigger first, then check dates of issue and service, any applicable extension or excluded period, and the procedural record. A notice can raise different issues for different financial years, and the conclusion for one period does not automatically decide another. The rules and facts of a particular case may affect the calculation; do not call a notice time-barred without checking them.
Periods through FY 2023-24: section 73 or section 74
Under section 73, the order period is three years from the due date for furnishing the annual return for the relevant financial year, or from the date of an erroneous refund. The notice must be issued at least three months before that order deadline. This section covers the specified tax, refund and ITC demands for reasons other than fraud, wilful misstatement or suppression of facts to evade tax.
Under section 74, the order period is five years from the annual-return due date or erroneous-refund date, and the notice must be issued at least six months before the order deadline. Section 74 applies where the alleged demand results from fraud, wilful misstatement or suppression of facts to evade tax. The department’s use of those words in a notice is an allegation, not proof by itself. The statutory text and requirements matter when evaluating the grounds.
CBIC’s GST FAQ on demands and recovery discusses the historical sections and the annual-return due date as a limitation reference. It dates from 2017, so use it as historical context rather than as a complete account of later amendments or the rules for FY 2024-25 onward.
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FY 2024-25 onward: section 74A
Section 74A applies to demands pertaining to FY 2024-25 onward. It requires the notice to issue within 42 months from the annual-return due date for the relevant year, or within 42 months from the date of an erroneous refund. The section also says the specified notice shall not issue where the relevant tax amount for a financial year is below ₹1,000.
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The order is due within 12 months from the notice. The Commissioner or specified senior authorised officer may extend that period by up to six months, where reasons are recorded in writing before the period expires. These are separate clocks: the 42 months govern issue of the notice, while the 12 months and possible extension govern the order after notice. The consolidated Act states the 42-month rule in section 74A(2); see the official text before applying it to a specific date calculation.
The section mapping follows the financial year to which the demand pertains, not simply the date a notice happens to arrive. A notice served later for an older period does not become a section 74A matter merely because section 74A is now in force. Conversely, do not carry the older three- and five-year rules into FY 2024-25 onward.
How are interest and penalties calculated?
Interest and penalty are distinct from the underlying tax and should be checked separately. Section 50 provides for interest when tax is not paid within the prescribed period. The cited statutory text sets an 18% notified-rate ceiling for ordinary delayed tax payment and describes calculation from the day after the due date. The actual amount depends on the applicable notified rate, amount outstanding, dates and any special statutory treatment; the 18% ceiling is not a claim that every case is charged at that rate.
For section 74A, where the specified fraud, wilful-misstatement or suppression grounds do not apply, the statutory penalty is 10% of tax due or ₹10,000, whichever is higher, subject to the section’s conditions. Where those grounds apply, the penalty is equivalent to the tax due, again subject to the statutory terms. For adjudicated section 73 matters, the penalty is 10% of tax or ₹10,000, whichever is higher, subject to that section. Section 74 has its own penalty structure. These figures are not universal flat charges: the section, findings, payment timing and statutory conditions matter.
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Do not assume an amount shown in a notice is final merely because it is itemised. Check the tax basis, the calculation period and whether the notice’s stated grounds and amounts are supported by the records. If the notice involves multiple years, reconcile and evaluate each year independently.
Can paying early reduce a GST penalty?
Yes, qualifying early-payment provisions can change penalty and closure consequences, but the available window depends on the section and whether payment is made before notice, after notice or after an order. The older 30-day routes under sections 73 and 74 must not be confused with section 74A’s 60-day routes.
| Route | When tax and interest are paid | Potential statutory consequence |
|---|---|---|
| Section 73 (through FY 2023-24) | Before notice | No notice for the amount paid, subject to the section’s terms. |
| Section 73 (through FY 2023-24) | Within 30 days of the notice | No penalty and proceedings are deemed concluded for the qualifying payment, subject to the section. |
| Section 74 (through FY 2023-24) | Before notice | Tax and interest with a 15% penalty, subject to statutory terms. |
| Section 74 (through FY 2023-24) | Within 30 days after notice | Tax and interest with a 25% penalty, subject to statutory terms. |
| Section 74 (through FY 2023-24) | Within 30 days after communication of the order | Tax and interest with a 50% penalty, subject to statutory terms. |
| Section 74A, non-fraud grounds | Before notice, or within 60 days of issue of notice | Payment of tax and interest can avoid penalty; timely post-notice payment concludes the notice proceedings under the section, subject to its conditions. |
| Section 74A, specified fraud-related grounds | Before notice; within 60 days of notice; or within 60 days of communication of the order | Tax and interest with a 15%, 25% or 50% penalty respectively, subject to statutory conditions. |
These routes are not interchangeable and may not resolve amounts or issues outside the qualifying payment. Confirm the correct section and exact deadline before paying, and preserve the payment evidence and any required filing. The complete conditions appear in the CGST Act. If you dispute the demand, payment and a reasoned reply are separate decisions; the table does not determine whether a demand is valid.
How do I pay or reply to a GST notice?
Payment is generally made through the GST portal’s prescribed process, while the response and payment-intimation forms are separate procedural steps. The current rule and portal instructions should be checked for the specific notice, particularly because the cited forms compilation predates section 74A.
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- Confirm the amount and route. Identify the section, relevant payment window and breakdown of tax, interest and penalty. Do not select a reduced-penalty route based only on a general summary; check the statutory conditions against the notice and payment history.
- Generate the payment challan where required. The payment rules describe a challan in GST PMT-06 and payment into the electronic cash ledger. Described channels include authorised-bank internet banking, card, NEFT/RTGS and limited over-the-counter payment, subject to the rules and portal availability.
- Check the ledger used for the liability. The electronic cash ledger and electronic credit ledger are distinct. Do not assume that ITC can be used to settle every interest, penalty or other amount; verify the current statutory payment rules and portal directions for each liability.
- File the relevant intimation or reply and retain proof. The CBIC rules compilation identifies DRC-03 for intimating payment, DRC-04 as the officer’s acknowledgement, DRC-05 as an order or intimation concluding proceedings in specified payment cases, and DRC-06 as a representation or reply. Check the current amended rule, form and portal workflow rather than relying only on the 2020 compilation.
- Track the response deadline and hearing. Keep the filed reply, attachments, acknowledgement, challan, ledger entry and any closure order together. If the notice offers or requires a hearing, record the date and comply with the notice’s instructions.
CBIC’s GST Payment Rules describe the payment framework, while the CBIC rules compilation includes the cited procedural forms. Since that compilation is from 2020, verify subsequent amendments before using a form or relying on a portal step.
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Is the section 128A interest-and-penalty waiver still available?
The section 128A waiver described by CBIC was a deadline-bound route for qualifying section 73 demands relating to FY 2017-18, 2018-19 and 2019-20. CBIC Circular 238/32/2024-GST records a generally notified date of 31 March 2025 by which the full demanded tax had to be paid to seek the benefit, with a separate six-month period for the specified redetermination situation.
As of November 2026, that ordinary payment deadline has passed. Treat the waiver as historical unless a later official change applies to the particular case; do not assume it remains open. The CBIC circular sets out the clarification and conditions.
What records help assess a GST notice?
A useful file lets you check both the legal deadline and the arithmetic without relying on memory. Keep the complete notice and annexures; service and delivery evidence; the cited section and financial year; annual-return due dates; returns and ITC or refund records; tax and interest workings; challans and ledger entries; prior replies, hearing records and orders; and any extension or other procedural communication.
Use those documents to compare the relevant dates and amounts, not just the headline demand. In particular, distinguish the notice issue date from the order deadline, and distinguish the claimed tax from interest and penalty. If the notice covers central, state or integrated GST liabilities, check the applicable statute and authority for each part. The central CGST rules are a framework, not a substitute for reviewing the actual instrument and jurisdiction.
For a disputed or significant demand, a qualified tax professional can assess the notice, the governing section and the procedural record. This guide cannot determine liability, calculate a case-specific deadline or replace a response tailored to the notice.
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Frequently Asked Questions
Does a GST notice itself mean the department has proved fraud?
No. A section 74 or section 74A notice may allege fraud, wilful misstatement or suppression, but the allegation is not itself an adjudicated finding. Read the reasons and evidence cited, and distinguish the notice stage from a later order.
Does section 74A apply if a notice issued after November 2024 concerns an older financial year?
Not just because of its issue date. Section 74A is the demand provision for matters pertaining to FY 2024-25 onward; the period to which the demand relates is central to identifying the route.
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The provisions described here use the due date for furnishing the annual return as the reference date, not simply the date the taxpayer eventually files. The exact statutory due date and any applicable extension or exclusion still need to be checked for the relevant year.
Is a show-cause notice the same as a GST recovery notice?
No. A show-cause notice sets out a proposed demand and invites a response; an adjudication order records a decision, while a recovery notice is a different procedural document. Identify what you received before deciding what deadline or next step applies.
