Chapter XV - Demands and recovery
Section 73
Section 73: Determination of tax for periods up to FY 2023-24 without fraud
Section 73 governs non-fraud CGST demand determination for tax periods through FY 2023-24; later periods use section 74A.
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This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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 for any reason, other than the 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 leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three 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 such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (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) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 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) or, as the case may be, the statement under sub-section (3), 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) or sub-section (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and 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 person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within three 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 three years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or sub-section (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax.
(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.
Introduction
The 2024 amendment limits section 73 to periods up to FY 2023-24. It covers unpaid or short-paid tax, erroneous refund and wrongly availed or utilised ITC where fraud, wilful misstatement or suppression to evade tax is not alleged.
Key takeaways
Correct period and allegation
First confirm the financial year is FY 2023-24 or earlier and the notice alleges the non-fraud route. FY 2024-25 onward belongs to section 74A.
Notice and response
The officer serves a show-cause notice for tax, section 50 interest and applicable penalty. The taxpayer can present a representation before determination.
Payment routes
Payment of tax and interest before notice with written intimation generally avoids notice for the paid amount; payment within thirty days after notice generally concludes proceedings without penalty, subject to the self-assessed-tax exception.
Order limit
The order is ordinarily issued within three years of the relevant annual-return due date, or three years from an erroneous refund, with the section 75 exclusions and rules of computation.
Correct period and allegation
First confirm the financial year is FY 2023-24 or earlier and the notice alleges the non-fraud route. FY 2024-25 onward belongs to section 74A.
Notice and response
The officer serves a show-cause notice for tax, section 50 interest and applicable penalty. The taxpayer can present a representation before determination.
Payment routes
Payment of tax and interest before notice with written intimation generally avoids notice for the paid amount; payment within thirty days after notice generally concludes proceedings without penalty, subject to the self-assessed-tax exception.
Order limit
The order is ordinarily issued within three years of the relevant annual-return due date, or three years from an erroneous refund, with the section 75 exclusions and rules of computation.
Practical checklist
Do
- Confirm the tax period and non-fraud ground.
- Reconcile each disputed supply, refund or ITC item.
- Track notice, representation and possible payment windows.
- Check section 75 hearing and order safeguards.
Avoid
- Apply the pre-FY 2024-25 demand route to a later financial year.
Frequently asked questions
Does section 73 govern FY 2024-25?
No. The amended subsection (12) limits it to periods up to FY 2023-24; section 74A covers FY 2024-25 onward.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026