Answer

1. F

   Facts

   Under Sec 73, if you pay the tax and interest within 30 days of the notice, no penalty is payable and proceedings close. Otherwise penalty is 10 percent of tax or ₹10,000, whichever is higher.

2. P

   Provisions and law

   • Sec 73, CGST Act 2017Demand where tax is short paid or ITC wrongly taken without fraud, for periods up to FY 2023-24
   • Sec 73(8), CGST Act 2017Payment within 30 days of the notice with interest ends proceedings without penalty
3. A

   Analysis

   On a demand of ₹4 lakh tax, paying ₹4 lakh plus interest within 30 days avoids penalty of ₹40,000. If you agree with only part of the demand, pay that part and contest the rest. Use DRC-03 and link it to the notice.

4. C

   Conclusion

   1. 1Decide which part you accept.
   2. 2Compute interest under Sec 50 to the payment date.
   3. 3Pay through DRC-03 linked to the notice within 30 days.
   4. 4Reply in DRC-06 on the rest.

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