Confusion while reading Section 76 along with Section 73/74

[Punit Agarwal]

How can Section 76 be differentiated from Section 73/74?

Say for E.g.

If i have not deposited the tax beyond 3 months of due date of filling GSTR-3B but correctly disclosed tax payable in GSTR-1, under which section can Department demand Tax.

The Area of concern for me is the Penalty.

Section 76 asks for 100 Penalty and 73/74 asks for Lower rates of penalty (Lowest being Nil and 15% respectively)

[KASTURI SETHI]

Sh.Punit Aggarwal Ji,

In this scenario, penalty under Section 73 will be imposed upon by the department. There is no confusion.

Section 73 stands for penalty on account of bona fide mistake. Mistake committed without intention to evade tax e.g. calculation error, procedural lapse, technical lapse etc.

Section 74 is for penalty on account of mala fide intention to evade tax.

Section 76 stands for penalty on those persons who collect tax which is not leviable as per the Act and keep that collected tax with himself. He does not depost such collected into Govt. account. This offence is very very serious. None has right to retain such tax with one's pocket.

[Mr Rao]

Dear sir,

I agree with Shri Kasturi sir.

[Punit Agarwal]

But Kasturi Sir,

Section 76(1) clearly states that " irrespective of whether such supplies in respect of which such amount collected is taxable or not"

So I believe 76 is not only restricted to non taxable supplies as you mentioned. There might be some other catch which I believe I am missing.

[KASTURI SETHI]

Sh.Punit Agarwal Ji, If you do not agree with me, you should explain what is hidden more therein. Such Section was in Service Tax and Central Excise also. Moreover, I have not 'forced' Sh.G.B.Rao to agree with my views. Do we both are unable to interpret and analyse Section 76. ?

[Ganeshan Kalyani]

Sri Punit Sir the provision 76(1) states that tax collected by taxpayer should not be retained with him. The tax collected may be actually collectable (on taxable supplies) or not collectable (on exempt supply) , but once collected should not be retained by taxpayer with him. It has to be deposited to Govt. treasury.

AI Summary

Retention of collected tax triggers strict deposit obligation and a distinct, more serious penalty regime than mistake-based defaults. Section 73 covers penalties for bona fide mistakes without intent to evade, while Section 74 targets mala fide intent to evade tax. Section 76 specifically prohibits retaining tax amounts collected from supplies-whether those supplies were taxable or not-and requires deposit of such collections into the government treasury; retaining collected tax invokes the distinct and more serious penalty regime under Section 76 compared with Sections 73/74.