Scrutiny, audit, credit denials, refunds and demands, from the first reconciliation through to the appellate stage. Advisory on rate, classification and place of supply before a position becomes a liability.
A scrutiny notice or a departmental audit is where most GST demands begin. Both are answerable with a reconciliation, and both become expensive when they are not answered on time.
Credit denial is the largest category of demand in this law. The grounds repeat: the supplier did not file, the invoice is not in the auto populated statement, the condition in Section 16 is said to be unmet, or the credit was taken after the cut off.
Refund is where a working capital problem becomes a legal one. Most rejections are documentary and most of those are recoverable if answered before the deficiency memo hardens into an order.
The rate follows the classification and the classification follows the description. Bundled supplies, works contracts and anything sold with a service attached are where the arguments concentrate.
Three regimes now sit side by side. Which one applies depends on the financial year and on whether fraud is alleged, and that decides both the period and the penalty.
Recovery moves quickly once an order is passed. The appeal with the pre-deposit is what stops it, and the arithmetic has to be done in the first week rather than the last.
Sections 73 and 74 govern the earlier years. Section 74A was inserted for the financial year 2024-25 onwards and unifies the two, with its own periods and its own penalty ladder. Confirm the position for the year in question.
| Section 73 | Section 74 | Section 74A | |
|---|---|---|---|
| Applies to | No fraud alleged, earlier years | Fraud or suppression alleged, earlier years | The financial year 2024-25 onwards |
| Notice within | Three months before the order limit | Six months before the order limit | Forty two months from the annual return due date |
| Order within | Three years from the annual return due date | Five years from the annual return due date | Twelve months from the notice, extendable by six |
| Pay before the notice | Tax and interest, no penalty | Tax, interest and fifteen per cent penalty | As provided in the section for the case |
| Reduced penalty window | Thirty days | Thirty days at twenty five per cent | Sixty days |
| Provision | Section 73 | Section 74 | Section 74A |
Section 74A is a recent insertion. The table states its headline periods; check the sub sections for the case you are dealing with. Work your own dates in the limitation calculator.
Most credit denials are evidentiary. The goods were received, the tax was paid, and the difficulty is producing that in the form the officer wants. Building the proof pack is usually the whole matter.
Where a supplier did not file, the position turns on what the recipient did to verify and to pay, and on how the department has been directed to treat such cases. It is a live area and it rewards a documented process.
The outer date for taking credit is the thirtieth of November following the financial year. The later amendments relaxed it for specified earlier years and for cases where a cancelled registration was revoked, and demands raised before those amendments are often answerable now.
Where the same credit is denied in one year and the tax is also demanded in another, or where a reversal has already been made, that has to be pointed out with the workings. It is common, and it is rarely picked up by the department on its own.
Paying the tax that is genuinely payable, with interest, before the notice or inside the reduced penalty window, is a technical move and not an admission on the rest. It removes penalty on that part, shrinks the demand, and makes the contested part of the reply read very differently.
A reply without a reconciliation is a denial. A reply with one is a document the officer can use to close the file. That difference decides a surprising number of matters at the scrutiny stage.
Provisional attachment of a bank account operates the moment it reaches the bank. It has its own remedy and its own limits, and both are time sensitive. Do not wait for it to lapse.
Usually there is something to say, and it depends on what you can show. Payment to the supplier including the tax, receipt of the goods or services, and a documented verification process at the time all matter. What the department has been directed to do in such cases has moved, so the position for the year in question needs checking rather than assuming.
Yes, within the period, with the reconciliation attached. An unanswered scrutiny notice does not stay a scrutiny notice. It becomes a demand, and the same explanation then costs an order of magnitude more to make.
No. It is ten per cent of the tax in dispute, over and above the admitted part which is paid in full, and it is subject to a statutory ceiling. Where the order involves only a penalty, the percentage runs on the penalty. The appeal planner shows the arithmetic.
A deficiency memo restarts the process rather than ending it, so the first question is whether the fresh application is still inside two years from the relevant date. The second is whether the deficiency is real, because a good many are answerable with the shipping bills, the realisation record and the statement the rules require.
It changes the period, the penalty and the standard the department has to meet. Suppression has to be alleged with particulars and established, not asserted. Where the facts were in the returns, that is the point the reply should lead with.
A first conversation costs you nothing but the hour, and it is where we tell you honestly whether the matter needs us at all.