Time limit for making redetermination under section 75

- Sales Tax - Soham Mashruwala

Provisions are made under Section 73 and Section 74 describing different situations for assessment/computation and collection of amount payable under GST Act. Under section 74 CGST action will be taken against the supplier in case of any fraud or knowingly misrepresentation or concealment of fact. In other cases action will be taken under section 73. Now if there is a conflict and an appellate authority quashes the proceedings under Section 74 taken by the officer and decides that the proceedings under Section 73 are to be taken then Section 75 of the CGST Act has to be considered. In this regard, circular number 185/17/2022- GST dated 27 December 2022 has been issued by the government. Regarding the time limit which is discussed in today's article.

1) In what time new notice has to be given?

In cases where a notice under section 74(1) has been issued and the same has been rejected by the appellate authority, a notice under section 73 has to be issued within 2 years from the date of passing of the order.

2) Why re-determine the amount?

In cases where the amount has to be re-determined under Section 75(2), the provisions of Section 73(2) and Section 73(10) have to be taken into consideration for proceeding under Section 73. As per section 73(10) the time limit which is written should be given notice as per section 73(2) three months before the time limit. Further, the order of Article 73(9) should be passed within three years from the time limit for filling the annual form. Thus, it follows that the notice under Section 73(1) can be given until 2 years and 9 months have elapsed from the due date of filing the annual return. In cases where wrongful refund has been given, notice has to be given within 2 years and 9 months from the date of refund order.

3) The original notice under section 74(1) is given after the expiry of the time limit under section 73 - in which case the notice under section 74(1) is given after 2 years and 9 months from the due date for filing the annual return and such notice is cancelled. A notice under section 73(1) cannot be given and all proceedings and show cause notices stand cancelled.

4) Notice for more than one year :-

If the proceedings are in progress for more than one financial year, but on completion, if the notice for any one financial year is given after 2 years and 9 months from the date of filing of the annual return under section 74(1), then a new notice for the same year under section 73( 1) cannot be given under, the proceedings will continue for other years.