Section 74A: the unified limitation regime from FY 2024-25
One provision now covers both fraud and non fraud cases, with a single limitation and a graded penalty. The old arithmetic does not travel forward.
Section 74A applies to determination of tax not paid, short paid, erroneously refunded or credit wrongly availed or utilised for the financial year 2024-25 onwards. It replaces the separate limitation periods in Sections 73 and 74 with a single scheme: the notice must be issued within forty two months from the due date for furnishing the annual return for the year, and the order within twelve months from the notice, extendable by six months. Penalty is graded, with the higher penalty applying where fraud, wilful misstatement or suppression is established.
What changed
Under the earlier scheme the department chose between Section 73, with a shorter limitation and a capped penalty, and Section 74, with a longer limitation and a hundred percent penalty. The choice was the entire battleground.
Section 74A unifies the limitation. The notice period is the same whether or not fraud is alleged, so the department no longer gains time by alleging fraud.
What fraud now affects is the penalty. The graded structure means the ingredient must still be pleaded and proved, but the incentive to allege it in order to buy limitation is gone.
Sections 73 and 74 continue to govern periods up to 2023-24. Do not import the Section 74A arithmetic into an earlier year, or the earlier arithmetic into a later one.
The dates to compute
Start with the due date for furnishing the annual return for the financial year in question.
Add forty two months. That is the outer date for issuing the notice.
From the date of the notice, add twelve months for the order, with the extension of up to six months available on the specified conditions being recorded.
The extension is not automatic. Where an order is passed in the extended period, ask for the record of the extension and the reasons.
The time excluded during a stay or in specified circumstances must be identified separately; a department that relies on exclusion should say so in the order.
The arguments that carry forward
The ingredient requirement survives. Where the higher penalty is imposed, fraud, wilful misstatement or suppression must be alleged in the notice with the supporting facts, and Section 75(7) prevents the order from supplying what the notice omitted.
The graded reductions for early payment survive in structure, and the arithmetic should be computed before deciding to contest.
Section 75(4) hearing rights, Section 75(6) reasoned orders and Section 75(7) confinement to the notice all apply unchanged.
The Section 168A extension litigation does not affect 2024-25 onwards, because the notifications relate to earlier years. That is a reason to keep the year specific tables separate.
What to do on Monday
Maintain two limitation tables — one for years up to 2023-24 and one for 2024-25 onwards — and never mix them.
Diarise the forty two month date for each open year from the annual return due date.
Where an order is passed in the extended period, ask for the extension record.
Answer the penalty ingredient separately from the tax merits in every Section 74A reply.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Does Section 74A apply to 2023-24?
No. It applies from the financial year 2024-25. Earlier years remain governed by Sections 73 and 74.
Does the unified limitation mean fraud allegations will reduce?
The incentive to allege fraud for limitation has gone. The incentive for penalty remains, so the allegation must still be answered.
Is the twelve month period for the order extendable?
Up to six months, on the conditions specified, and the extension must be justified on the record.
What is the effect on voluntary payment?
The graded reduction structure continues. Compute the pre notice and post notice figures before choosing.
Does a single notice cover multiple years?
The practice of bunching years in one notice has been questioned, because limitation and quantification are year specific. Object where a bunched notice obscures the year wise position.
In this cluster
- GST show cause notice: how to read it, and how to answer it
- Section 73 versus Section 74: where the department overreaches, and how to prove it
- DRC-01A pre notice intimation: reply, pay, or wait?
- From DRC-01 to DRC-07: the adjudication chain in one page
- Vague and omnibus notices: how Amrit Foods, Brindavan Beverages and Oryx Fisheries decide GST demands
- Suppression of facts under Section 74: what the department must actually prove
- Personal hearing under Section 75(4): the right, and the consequence of denying it
- Orders that travel beyond the notice: Section 75(7) in practice
- Limitation for GST demands: the year by year table you should keep in every file
- Section 168A extensions: the challenge to extended limitation, and where the litigation stands
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.