Find
For periods up to FY 2023-24 under Sec 74, paying before the notice needs tax, interest and penalty of 15 percent of tax. For FY 2024-25 onwards under Sec 74A, the fraud case penalty before notice is also 15 percent.
GST
Penalty in fraud cases at the DRC-01A stage
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Provisions
Sec 74(5), CGST Act 2017; Sec 74A, CGST Act 2017
Analysis
On ₹4 lakh tax, paying now costs ₹60,000 penalty against up to ₹4 lakh later. Paying accepts the fraud allegation, so only do it if the facts support it. If you dispute fraud, argue it is a Sec 73 case.
Close
- Check whether fraud is really alleged and supported.
- If accepting, pay tax, interest and 15 percent penalty.
- If disputing, explain in Part B.
- Keep the payment and reply records.
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