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

Time of supply in government works contracts determines GST rate, while disclosed turnover may challenge fraud-based demand proceedings.
GST rate liability for a Government civil works contract depends on the time of supply, rather than solely on delayed receipt of consideration. The rate applicable when the supply became taxable governs the tax liability, requiring verification of work-completion, invoice, payment, and GST return dates. Proceedings under Section 74 require consideration of fraud, wilful misstatement, or suppression with intent to evade tax. Disclosure of turnover in GST returns, GSTR-7 acceptance, GST payment, and income-tax reporting are relevant to the allegation of suppression and to limitation objections.