GST
Checking if a fake ITC notice is time-barred
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Facts
Under Sec 73 the order must issue within three years from the annual return due date, with the notice at least three months earlier. Under Sec 74 the order limit is five years. Under Sec 74A the notice must issue within 42 months.
Provisions and law
- Sec 73(10), CGST Act 2017The order under Sec 73 must be issued within three years from the due date of the annual return for the year; the notice at least three months before that.
- Sec 74(1), CGST Act 2017Show cause notice where tax is short paid or ITC wrongly availed by fraud, wilful misstatement or suppression, for periods up to FY 2023-24.
- Sec 74A, CGST Act 2017For FY 2024-25 onwards, one procedure for demands: notice within 42 months of the annual return due date, order within 12 months of the notice; penalty depends on whether fraud is alleged.
Analysis
For FY 2020-21, the GSTR-9 due date was extended, so dates must be checked against notifications, including any Sec 168A extensions. If the notice is under Sec 74 only to extend time, challenge the fraud allegation. A time-barred notice is a strong ground, but raise it along with merits, not alone.
Conclusion
- Find the annual return due date for the year in the notice.
- Compute the last date for notice and order under the section used.
- Check extensions notified for that year.
- Raise limitation in the reply along with merits.
A Savvy can do this for you
Reply to fake ITC notice when a supplier is found non-existent, Sec 16(2)(c)
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