Section 73 of CGST Act, 2017 : Section 73: Determination Of Tax Not Paid Or Short Paid Or Erroneously Refunded Or Input Tax Credit Wrongly Availed Or Utilised For Any Reason Other Than Fraud Or Any Wilful-Misstatement Or Suppression Of Facts

Explanation using Example

Imagine a business owner, Mr. Sharma, who runs a manufacturing company. After filing his GST returns for the financial year, he realizes that he has underreported his sales, leading to a lower GST payment than what was actually due. This was an honest mistake and not an attempt to evade taxes.

The proper GST officer reviews Mr. Sharma's returns, notices the discrepancy, and believes that tax has been short paid. As per Section 73(1) of the CGST Act, 2017, the officer issues a notice to Mr. Sharma asking him to show cause why he should not pay the additional tax due along with interest and any applicable penalty.

Mr. Sharma receives the notice well before the three-year deadline as stated in Section 73(10), meaning the officer complied with Section 73(2) by issuing the notice timely.

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