Section 74A: 42 Months, 12 Months, and the ₹1,000 Floor

Section 74A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

From FY 2024-25 there is one demand provision, not two. The limitation is the same whether or not fraud is alleged — only the penalty differs.

Section 74A, inserted by the Finance (No. 2) Act, 2024, notified through Notification No. 17/2024-CT dated 27.09.2024, w.e.f. 01.11.2024, applies to determinations pertaining to FY 2024-25 onwards (s.74A(12)). 74A(2): the notice must be issued within forty-two months from the due date for furnishing the annual return for the year concerned, or within forty-two months from the date of erroneous refund. 74A(7): the order must be issued within twelve months from the date of issuance of the notice, extendable by a maximum of six months by the Commissioner or an authorised officer not below the rank of Joint Commissioner, for reasons recorded in writing, before the expiry of the period. Proviso to 74A(1): no notice shall be issued where the amount for a financial year is less than one thousand rupees.

What changed

Two structural shifts follow.

Limitation is uncoupled from the allegation. Under s.73 and s.74 the department's limitation depended on whether it alleged fraud — which gave a strong incentive to allege it. Under s.74A the limitation is the same either way, and the allegation affects only the penalty. That removes the limitation motive for a suppression allegation.

The order clock is separate. Under s.73 and s.74 both the notice and the order had to fall inside a single period measured from the annual return due date. Under s.74A the notice clock runs from the annual return due date and the order clock runs from the notice — with its own extension.

Working the dates

FY 2024-25. The annual return due date is 31 December 2025.

• Notice — within 42 months, so by 30 June 2029.
• Order — within 12 months of the notice, extendable by 6, so at the outer edge 30 June 2030 where the notice issued on the last day and the full extension was ordered.

FY 2025-26. Annual return due 31 December 2026; notice by 30 June 2030; order accordingly.

For an erroneous refund, the 42 months runs from the date of the erroneous refund — a transaction date, not a year-end. Each refund therefore carries its own clock, and a refund sanctioned early in a year expires before one sanctioned late in the same year.

The extension, and its condition

The proviso to s.74A(7) permits an extension of the twelve months by a maximum of six months, but only:

• by the Commissioner, or an officer authorised by the Commissioner, senior in rank to the proper officer and not below the rank of Joint Commissioner of Central Tax;
• having regard to the reasons for delay, to be recorded in writing; and
• before the expiry of the specified period.

That last requirement is the one to check. An extension purportedly made after the twelve months have run does not extend a period that has already expired. And the extension must be by an officer of the required rank who is senior to the proper officer — a peer cannot extend.

The ₹1,000 floor

"Provided that no notice shall be issued, if the tax which has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised in a financial year is less than one thousand rupees."

This is new. There was no de minimis under s.73 or s.74.

Two features:

It is measured per financial year, not per notice, per issue or per period.

It bars the notice, not merely the recovery. Where the amount for a year is below ₹1,000, no s.74A notice may issue for that year at all.

For multi-year notices, the threshold is applied year by year, so a year falling below ₹1,000 should be excluded from the notice even where other years exceed it.

The statement under 74A(3) and (4)

74A(3): where a notice has been issued for a period, the officer may serve a statement containing details for other periods.

74A(4): service of that statement is deemed to be service of a notice, subject to the condition that the grounds relied upon for those other periods are the same as in the earlier notice.

The condition is the whole of it. A statement extending a notice to further periods is valid only where the grounds are identical. Where the department uses a statement to raise a different issue for a different period, it is not a statement under s.74A(3) — it is a new demand needing its own notice, its own limitation check and its own reply.

That is worth verifying every time a statement is received: compare the grounds, paragraph by paragraph, against the original notice.

Section 75(10) as amended

Section 75(10) formerly deemed adjudication proceedings concluded if the order was not issued within three years (s.73) or five years (s.74). It was substituted by the Finance (No. 2) Act, 2024 to include the period in s.74A(7).

So the consequence of missing the s.74A order deadline is the same: the adjudication proceedings are deemed to be concluded. The demand does not survive the deadline.

That makes the date of the notice and the date of any extension order two of the most important dates in the file. Both should be diarised on receipt. The GST demand limitation map →

Key takeaways

• Section 74A governs determinations pertaining to FY 2024-25 onwards, for both fraud and non-fraud.
• Notice within 42 months of the annual return due date, or of the erroneous refund.
• Order within 12 months of the notice, extendable by 6 months by the Commissioner or a Joint Commissioner or above senior to the proper officer, on written reasons, before expiry.
• No notice where the amount for a financial year is less than ₹1,000.
• A statement under 74A(3) extends a notice to other periods only if the grounds are the same.
• Missing the order deadline means the proceedings are deemed concluded under s.75(10).

Read next

• The GST Demand Limitation Map: Sections 73, 74 and 74A
• Section 74A Penalties: Four Windows and What Each Costs
• The Suppression Allegation and How It Is Answered
• Section 74A of CGST Act 2017 — Determination of Tax

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition).