Topic guide · 36 provisions

Notices, Demands & Recovery

When the department writes to you

What to do when the department writes to you.

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Most GST notices are not accusations – they are system-generated mismatches. A difference between GSTR-1 and GSTR-3B, or between 3B and 2B, generates a scrutiny notice asking you to explain. Explained properly with a reconciliation, most of them close there.

If it escalates, the route depends on intent. Section 73 covers honest errors, with penalty capped at 10% of tax – and nil if you pay before the notice. Section 74 alleges fraud or suppression, and the penalty starts at 100%. For periods from FY 2024-25 the two have merged into Section 74A, but the fraud distinction still drives the penalty.

The most important early decision is whether the fraud allegation is justified. Contesting classification into Section 74 is often worth far more than arguing the tax itself.

The cheapest rung is always the first one. Answering a scrutiny notice properly is far less expensive than appealing an order.

Worked example

The same shortfall, under two different sections

Tax short-paid	₹5,00,000	Identical facts either way
Under Section 73 (honest error)	Penalty ₹50,000, or nil if paid early	10% cap
Under Section 74 (fraud alleged)	Penalty ₹5,00,000, reducible to ₹75,000 if paid early	100% headline

Ten times the penalty for the same rupees of tax. Which section the notice is issued under is often worth more than the tax argument itself – and a bare allegation of fraud is not the same as proving it.

The mistakes that cost people money

Not theoretical risks — the ones we actually see land on clients’ desks.

Ignoring a scrutiny notice because the amount looks small. Non-response escalates it to a formal demand computed on the department’s assumptions, not yours.

Paying a demand you disagree with just to make it stop, without checking whether the limitation period had already expired.

Letting the three-month appeal window pass. Beyond four months, the Appellate Authority has no power to condone the delay at all.

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Notices, Demands & Recovery — the complete guide

14 pages covering all 36 provisions, with the plain-language explanation and practice notes for each. Print it, keep it, share it with your accountant.

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Common questions on this

Straight answers to what people actually ask us.

Got a Notice for GSTR-1 vs GSTR-3B Mismatch — What Now?

A mismatch notice between GSTR-1 and GSTR-3B isn’t automatically a demand — here’s how to reconcile it and rep…

GST Officer Attached My Bank Account — What Can You Do?

A provisional bank attachment under Section 83 can be challenged within 7 days — and courts have struck down m…

Documents Needed to Reply to a GST Show Cause Notice

A proper GST SCN reply needs more than an explanation — here’s the exact document checklist that makes a reply…

Difference Between Section 73 and Section 74 GST Notices

Section 73 is for genuine errors, Section 74 is for fraud — with very different penalties. From FY 2024-25, bo…

Can You Still Apply for the GST Amnesty Scheme (Section 128A) Now?

Based on the last notified dates, the 128A amnesty payment and application windows have both passed — here’s e…

Difference Between SPL-01 and SPL-02 Forms for the 128A Waiver

SPL-01 is for cases with no order yet; SPL-02 is for cases where a demand order already exists. Here’s exactly…

Does the 128A Amnesty Cover Section 74 Fraud Cases Too, or Only Section 73?

No — Section 128A explicitly excludes Section 74 fraud demands. It only waives interest and penalty on genuine…

Every provision on notices, demands & recovery

All 36 of them, each with a plain-language explanation and the full legal text.

CGST Rules, 2017 · 23

Rule 142 Notice and order for demand of amounts payable under the Act Rule 142A Procedure for recovery of dues under existing laws Rule 142B Intimation of certain amounts liable to be recovered under section 79 of the Act Rule 143 Recovery by deduction from any money owed Rule 144 Recovery by sale of goods under the control of proper officer Rule 144A Recovery of penalty by sale of goods or conveyance detained or seized in transit Rule 145 Recovery from a third person Rule 146 Recovery through execution of a decree, etc Rule 147 Recovery by sale of movable or immovable property Rule 148 Prohibition against bidding or purchase by officer Rule 149 Prohibition against sale on holidays Rule 150 Assistance by police Rule 151 Attachment of debts and shares, etc Rule 152 Attachment of property in custody of courts or Public Officer Rule 153 Attachment of interest in partnership Rule 154 Disposal of proceeds of sale of goods or conveyance and movable or immovable property Rule 155 Recovery through land revenue authority Rule 156 Recovery through court Rule 157 Recovery from surety Rule 158 Payment of tax and other amounts in instalments Rule 159 Provisional attachment of property Rule 160 Recovery from company in liquidation Rule 161 Continuation of certain recovery proceedings

CGST Act, 2017 · 13

Section 73 Determination of tax, 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 for any reason other than fraud or any willful-misstatement or suppression of facts Section 74 Determination of tax, 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 Section 74A 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 General provisions relating to determination of tax Section 76 Tax collected but not paid to Government Section 77 Tax wrongfully collected and paid to Central Government or State Government Section 78 Initiation of recovery proceedings Section 79 Recovery of tax Section 80 Payment of tax and other amount in instalments Section 81 Transfer of property to be void in certain cases Section 82 Tax to be first charge on property Section 83 Provisional attachment to protect revenue in certain cases Section 84 Continuation and validation of certain recovery proceedings

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