Answer

1. F

   Facts

   From FY 2024-25 Sec 74A applies. Paying tax and interest before the notice means no penalty if fraud is not alleged, and 15 percent penalty if it is.

2. P

   Provisions and law

   • 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.
   • Sec 74A(8), CGST Act 2017Under Sec 74A, paying tax and interest before the notice means no penalty in non-fraud cases; in fraud cases a 15 percent penalty is also paid.
   • Rule 142(1A), CGST Rules 2017Before a show cause notice, the officer may communicate the tax, interest and penalty ascertained in Part A of DRC-01A; the person may pay or give submissions in Part B.
3. A

   Analysis

   Sec 74A has one time limit for both types: notice within 42 months of the annual return due date. So the department has longer to issue notices for small errors than under old Sec 73. If the error is genuine, paying at DRC-01A stage is usually cheapest. Check whether the intimation alleges fraud, as it changes the penalty.

4. C

   Conclusion

   1. 1Confirm the period is FY 2024-25 or later.
   2. 2Check whether fraud is alleged.
   3. 3Compute tax and interest, plus 15 percent if fraud.
   4. 4Pay through DRC-03 and inform in Part B.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.