Penalties Section 74 CGST — Fraud Tax Demand (Interest + 100% Penalty)
Section 74 CGST — Fraud Tax Demand (Interest + 100% Penalty)
CGST Act 2017 — 74
Where tax default is by reason of fraud, wilful misstatement, or suppression of facts: tax + 18% interest + 100% penalty. Reduced to 15%/25%/50% if paid at different stages.
The Penalty
100% of tax (reducible to 15% / 25% / 50% based on stage of payment)
- Cap
- 100% of tax involved
- Calculation base
- Tax evaded due to fraud / wilful misstatement / suppression
- Period
- Interest until payment; penalty is one-time.
When does this apply?
Tax default attributable to fraud, wilful misstatement, or suppression of facts.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹0₹1,00,000 × 0% tax × 100%
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Fraud tax ₹5,00,000 — order stage | 100% × ₹5 lakh | ₹5,00,000 |
| Same, paid pre-SCN with interest | 15% × ₹5 lakh | ₹75,000 |
How it is levied
SCN within 4y6m from due date of annual return; order under s.74(9). Payment at each stage attracts reduced penalty per s.74(5)/(8)/(11).
⚠ VERIFY
Fraud allegation must be established; a s.73 case wrongly invoked as s.74 is often reduced on appeal. Confirm the fraud/suppression evidence before conceding.