Section 73 GST Demand Notice FY 2022-23: Deadline 30 Sep 2026
GST officers must issue Show-Cause Notices for FY 2022-23 non-fraud demands under Section 73 CGST Act by 30 September 2026. Here is who is affected, what a valid notice must contain, and what to do before the window closes.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Central Goods and Services Tax Act, 2017, Section 73 — Effective: ongoing. Source: CBIC (CGST Act, 2017). Last reviewed by CA Harun Raaj: September 2026.
If you run a GST-registered business, you may already be holding a Show-Cause Notice (SCN) for Financial Year 2022-23 — or one may land in your GST portal inbox in the next few days. Section 73(10) of the CGST Act fixes a hard three-year limit from the GSTR-9 due date for issuing a non-fraud demand order. For FY 2022-23, GSTR-9 was due on 31 December 2023, which places the order deadline at 31 December 2026. Because Section 73(2) requires the SCN to precede the order by at least three months, the SCN issuance deadline is 30 September 2026. Officers cannot issue a fresh Section 73 SCN for FY 2022-23 after that date.
Who Is Affected
Any GST-registered taxpayer with one of these situations during FY 2022-23 is a realistic target for a Section 73 SCN:
- ITC claimed in GSTR-3B that does not reflect in GSTR-2B from the corresponding supplier.
- GSTR-1 versus GSTR-3B mismatches, where outward supply appears understated in GSTR-3B.
- ITC availed in excess of the eligible ceiling under Rule 36(4) of the CGST Rules.
- Tax not paid on advances received during the year.
- Zero-rated credit claimed without actual exports or a valid LUT on record.
Section 73 is the non-fraud provision. It covers tax non-payment, short payment, erroneous refund, or wrongly availed ITC where the department does not allege fraud or wilful misstatement.
Practical Impact for Your Business
An SCN is not a demand for immediate payment — it is a formal invitation to respond. Ignoring it lets the proper officer pass an ex parte order, which can then be enforced against your bank account, ITC balance, or property.
There is a genuine incentive built into the law: Section 73(8) waives penalty entirely if you pay the demanded tax and interest within 30 days of receiving the SCN.
Key point: Under Section 73(8) CGST Act, paying the demanded tax plus interest within 30 days of receiving the SCN removes the penalty entirely.
A recent GST Appellate Tribunal (GSTAT) ruling, citation APL/54/LCK/2026 dated 14 September 2026, adds an important procedural check: Form DRC-01 issued under Rule 142(1)(a) of the CGST Rules is a summary of the SCN, not a substitute for it. The Tribunal held that where the underlying SCN is missing or addressed to the wrong taxpayer, the demand proceedings must be set aside. Every taxpayer receiving a DRC-01 should confirm that a proper SCN under Section 73(1) accompanies it and that it names the correct GSTIN.
Section 73 vs Section 74 vs Section 74A
Steps to Take Now
- Check your notices on the GST portal. Log in at gst.gov.in → Services → User Services → View Notices and Orders. Confirm the demand period is FY 2022-23 and that a DRC-01 is accompanied by an actual SCN.
- Verify the addressee and jurisdiction. The SCN must carry your GSTIN and be signed by the officer with proper jurisdiction. A mismatch is a procedural point worth raising, in light of GSTAT's ruling in APL/54/LCK/2026.
- If the demand is admitted, pay within 30 days. Tax plus interest paid within that window discharges the penalty entirely under Section 73(8).
- If the demand is disputed, file a reply within the time stated in the SCN, supported by GSTR-2B, purchase invoices, books of account, and bank statements. A notice left unanswered converts into an ex parte order.
- Bring in your Chartered Accountant early. With the SCN issuance window closing on 30 September 2026, officers may issue notices right up to the deadline, and a considered reply needs time to prepare. Our GST Audit and Investigation team reviews FY 2022-23 liability positions and drafts notice replies; our GST Advisory and Registration team helps assess whether voluntary payment under Section 73(8) is the right call for your specific facts.
Illustrative Example
A Pune-based MSME manufacturer with FY 2022-23 turnover of ₹4.2 crore had availed ₹8.5 lakh in ITC, while GSTR-2B showed only ₹6.9 lakh as eligible — a ₹1.6 lakh gap. In September 2026, the company received an SCN for the ₹1.6 lakh excess ITC plus interest. On review, ₹1.1 lakh turned out to be a timing difference — the supplier had filed GSTR-1 late but had since paid tax, and the credit now reflects in GSTR-2B. The remaining ₹0.5 lakh was genuinely ineligible. The approach: pay the ₹0.5 lakh plus interest within 30 days under Section 73(8) to avoid penalty on that portion, and file a detailed reply for the ₹1.1 lakh backed by the supplier's GSTR-2B trail.
I'm CA Harun Raaj, Visakhapatnam. If you have received a Section 73 SCN for FY 2022-23, or want your ITC position reviewed before 30 September 2026, get in touch with our team.
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See Also
Frequently Asked Questions
I received a DRC-01 but no separate SCN for FY 2022-23. Is this notice valid?
Not on its own. GSTAT's ruling in APL/54/LCK/2026 (14 September 2026) held that Form DRC-01 under Rule 142(1)(a) CGST Rules is a summary of the show-cause notice, not the SCN itself. The proper officer must also serve a valid SCN under Section 73(1) CGST Act naming your GSTIN; a DRC-01 without it is a procedural defect worth raising.
What happens if I do not respond to a Section 73 SCN for FY 2022-23?
The proper officer can pass an ex parte order confirming the demand plus interest under Section 50 CGST Act and penalty under Section 73(9). Unrecovered amounts can then trigger recovery action under Section 79 CGST Act, including against your bank account or ITC balance.
Does paying within 30 days of the SCN waive the entire penalty under Section 73?
Yes. Section 73(8) CGST Act waives penalty in full where tax and interest are paid within 30 days of receiving the SCN. This benefit applies only to Section 73 (non-fraud) cases.
Can the 30 September 2026 SCN deadline for FY 2022-23 be extended?
No extension had been notified as of the source date referenced in this article. The deadline under Section 73(2) read with Section 73(10) CGST Act stands at 30 September 2026 for FY 2022-23 non-fraud demands.
Does Section 74A CGST Act apply to my FY 2022-23 GST notice?
No. Section 74A, inserted by the Finance (No.2) Act, 2024, is a unified demand provision that applies to tax periods from 1 August 2024 onwards. FY 2022-23 continues to be governed by Section 73 CGST Act.
What is the difference between a Section 73 and a Section 74 GST notice?
Section 73 covers tax non-payment, short payment, erroneous refund, or wrongly availed ITC without any allegation of fraud or wilful misstatement. Section 74 applies where fraud, wilful misstatement, or suppression of facts is alleged, and carries a reduced 25% penalty option if paid within 30 days of the SCN, instead of a full waiver.
Why is the GSTR-9 due date relevant to my FY 2022-23 SCN deadline?
Section 73(10) CGST Act measures the three-year order deadline from the due date of filing the Annual Return (GSTR-9) for that financial year. For FY 2022-23, GSTR-9 was due on 31 December 2023, which fixes the order deadline at 31 December 2026 and the SCN deadline three months earlier, on 30 September 2026.
Should I still reply if I plan to pay the demand admitted in the SCN?
Yes. Even where you intend to pay under Section 73(8) to secure the penalty waiver, confirm the SCN correctly states your GSTIN, the period, and the demand amount before paying, and keep proof of payment within the 30-day window on record.
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