In a significant update relevant to GST compliance and litigation, the Central Board of Indirect Taxes and Customs (CBIC) has clarified the time limits for issuance of Show Cause Notices (SCNs) and Orders under Sections 73 and 74 of the Central Goods and Services Tax (CGST) Act, 2017.

This timeline is crucial for both taxpayers and professionals to monitor possible demand notices and adjudications, especially as the window of limitation draws near for earlier financial years.

What Are Sections 73 and 74 of CGST Act?

• Section 73 pertains to cases not involving fraud or willful misstatement, allowing a three-year time frame from the due date for filing annual returns.
• Section 74 deals with cases involving fraud, suppression of facts, or willful misstatement, with a five-year time frame for issuing orders.

Time Limits for Issuance of SCNs and Orders

Why This Matters

Taxpayers need to keep a close eye on these deadlines to:

• Avoid surprise demands.
• Prepare for audit responses or representations.
• Seek legal recourse if SCNs or Orders are issued beyond the permissible period.

Practical Tip for Businesses

If your business has GST exposure from past years, especially FY 2017-18 to 2019-20, it is prudent to:

• Revisit GST returns and annual filings.
• Consult legal counsel for risk mitigation strategies.
• Prepare for potential SCNs within the limitation periods stated above.

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