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GST Demand Notice Penalty Calculator (Section 73 & 74)

Penalty Calculator

GST Demand Notice Penalty Calculator (Section 73 & 74)

Calculate exact penalties, interest, and late fees based on Indian compliance law

Received a GST show cause notice? The penalty you face depends entirely on whether the notice is under Section 73 or Section 74 of the CGST Act, and how quickly you respond.

Section 73 covers genuine errors - tax short-paid, wrong ITC claimed, or excess refund taken without fraudulent intent. Under Section 73(8), if you pay the full tax demand plus interest within 30 days of the show cause notice, no penalty applies at all. This is the law explicitly - "no penalty shall be payable and all proceedings shall be deemed to be concluded." If the 30-day window passes, a penalty of 10% of the demand (minimum Rs. 10,000) applies when the order is passed.

Section 74 covers fraud, wilful misstatement, and suppression of facts. The penalty structure is different: 15% if paid within 30 days of the SCN, 25% if paid before the order is passed, and 100% (equal to the full demand amount) after the order. Interest under Section 74 accrues at 24% per annum, not 18%.

This calculator shows your exposure across all scenarios so you can make an informed decision about when to pay.

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How to Use This Calculator

The most important number:

Days since the notice was issued. If you are within 30 days and the notice is under Section 73, paying now means zero penalty. That window closes fast.

Scenario comparison:

The calculator shows three scenarios side by side - what you owe if you pay now, before the order, and after the order. The difference between paying now versus after the order under Section 74 is the difference between 15% penalty and 100% penalty.

Interest keeps growing:

The interest shown is an estimate based on the days entered. It increases by the day. The demand amount and penalty are fixed by the section - the interest is the variable.

If you received a notice:

Respond within the deadline even if you cannot pay immediately. Not responding leads to an ex-parte order, which removes all penalty reduction options.

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Frequently Asked Questions

Zero. Section 73(8) of the CGST Act states explicitly that "no penalty shall be payable" if tax and interest are paid within 30 days of the show cause notice. This is the most important window in any Section 73 case.

Section 73 covers non-fraud cases - genuine errors, oversight, or difference of interpretation. Section 74 applies where the department alleges fraud, wilful misstatement, or suppression of facts. Section 74 carries higher penalties (up to 100% of tax) and higher interest (24% vs 18%). Which section applies is stated in the notice.

100% of the tax demand - equal to the full amount of tax evaded. This is in addition to the tax itself and interest at 24% per annum. Evasion above Rs. 5 crore under Section 74 can also lead to prosecution under Section 132 of the CGST Act.

Yes. Appeal lies to the Appellate Authority (Section 107) within 3 months of the order. A pre-deposit of 10% of the disputed tax must be paid before the appeal is heard. If the appeal fails, further appeal lies to GSTAT, then the High Court.

Section 73: 18% per annum on the outstanding tax (Section 50). Section 74: 24% per annum where excess ITC was wrongly availed and utilised. Both rates are calculated from the original due date of the tax, not the notice date.
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How we reviewed this page

The penalty amounts, deadlines, and regulatory requirements on this page are sourced directly from official government portals. We do not use secondary sources. When regulations change, we update the page.