Rahul has filed his GST Return GSTR-3B for the month of September, 2021. on 19 October, 2021. and paid GST liability of ₹5 lakh after setting-off Input Tax Credit of ₹2.50 lakh. At the time of scrutiny of books and docum

Section 74 of Central Goods and Services Tax Act, 2017 deals with the provisions relating the determination of Penalty in case of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed by reason of fraud or any wilful statement. As per the provision of section 74 of Central Goods and Services Tax Act, 2017 penalty in case of fraud shall be calculated as follows: Conditions Amount of Penalty If Tax and interest is paid before issuance of show cause notice 15% of tax amount due If Tax and interest is paid within 30 days from issuance of show cause notice 25% of tax amount due If Tax and interest is paid within 30 days of communication of adjudication order 50% of tax amount due In any other case (i.e. If Tax and interest is paid after 30 days of adjudication order) 100% of tax amount due (i) In the given case, Rahul has claimed Input Tax Credit (ITC) of ₹1,80,000 on a fake tax invoice. So ITC wrongly availed by reason of fraud is ₹1,80,000. Hence amount of Tax due is ₹1,80,000 which will be liable to penalty under section 74 of Central Goods and Services Tax Act, 2017. (ii) In the first case, if Rahul Pays Tax and interest on 25 February, 2023 (i.e. within 30 days of issuance of show cause notice), the penalty under section 74 of Central Goods and Services Tax Act, 2017 will be 25% of ₹1,80,000 (i.e. ₹45,000). (iii) In second case, if Rahul Pays Tax and interest before issue of show cause notice, the penalty under section 74 of Central Goods and Services Tax Act, 2017 will be 15% of ₹1,80,000 (i.e. ₹27,000).