TaxTMI 
TaxTMI 
Dear Sir,
A notice was issued u/s 74 of the CGST Act to pay tax at 12% instead of 5%. If I pay the tax now , can my customer get the ITC based on my debit note .
Notice Under Section 74 of the CGST ACt
20 Oct 2019 
3 Replies 
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Input tax credit denial where tax demand under Section 74 blocks supplier's ITC claim after show-cause notice issued.
Taxes demanded and paid under Section 74 are excluded from input tax credit under Section 17(5)(i); once a show-cause notice under Section 74 is issued the taxpayer cannot claim ITC on the differential amount, and ITC is available only if the taxpayer voluntarily pays the tax into the government account prior to enforcement proceedings. (AI Summary)
Taxes demanded and paid under Section 74 are excluded from input tax credit under Section 17(5)(i); once a show-cause notice under Section 74 is issued the taxpayer cannot claim ITC on the differential amount, and ITC is available only if the taxpayer voluntarily pays the tax into the government account prior to enforcement proceedings. (AI Summary)