GST
Show cause notice on the same blocked credit
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Facts
Now there are two tracks: the block and the demand. Reply to the show cause notice on merits within its time, and keep pressing for release of the block.
Provisions and law
- Sec 73, CGST Act 2017Demand of tax or wrongly availed ITC in non-fraud cases, for periods up to FY 2023-24
- Sec 74A, CGST Act 2017Common demand provision for FY 2024-25 onwards, fraud and non-fraud cases
- Rule 86A(2), CGST Rules 2017Debit may be allowed again, fully or partly, once the officer is satisfied
Analysis
A demand under Sec 73, 74 or 74A for the same ITC is decided by an order after your reply. If the order is in your favour, ask for the block to be lifted. If you accept part of the demand, payment within the time in the law reduces or removes penalty. Example: under Sec 73 for older years, paying within 30 days of the notice ends proceedings without penalty.
Conclusion
- Note the reply deadline in the notice.
- File a detailed reply in DRC-06 with evidence.
- Attend the hearing.
- Decide with advice on paying any accepted part.
- Use the outcome to seek release of the block.
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