Goods and Service Tax under Sec-73 and 74

[giri gattupalli]

Respected Sir,

One of my client is a works Contractor dealing in Govt. Civil works only. He has received during F.Y. 2025-26 he has received an amount of Rupees One Crore (Approx) and paid GST @ 12% as the work executed during F.Y.2018-19 and the bill received during 2025-26 after long pending with Government due to some legal issues with Govt. and now the Department issued notice u/s 74 asking to pay tax @ 18% in the above circumstances whether the notice u/s 74 is sustainable. Please discuss.

AI Summary

GST rate applicability for delayed government works-contract billing raises questions over tax demand sustainability under enforcement proceedings.
Sustainability of a GST demand under section 74 is questioned where a works contractor undertaking Government civil works received delayed payment in financial year 2025-26 for work executed in financial year 2018-19. GST was paid at 12%, while the department has sought tax at 18%. The issue concerns whether the higher rate demand is sustainable considering the period of execution, delayed billing and payment, and the rate already applied to the works-contract transaction.