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28 Aug 2026 
6 Replies 
535 Views 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.
0 respected sir, i try to elaborate above query
1. taxable person is a govt works contractor.
2. around 1 cr received for works executed to govt.
3. GSTR-7 uploaded by contractee department and accepted by taxable person on gst website by filing tds returns.
4. turnover disclosed in GSTR-3B and gst paid @12% .(and the contractee department awarded 12% gst only.)
5. turnover disclosed in ITR also.
and now the ellegation is 12% paid instead of 18%. and sec 74 notice issued.
please discuss whether notice under sec 74 sustainable as the turnover is disclosed in gst returns before issuence of notice
0 My preliminary view: the section 74 notice is strongly contestable, particularly on:
Before replying to the notice, please check the exact date of work completion, invoice date, date of filing of the relevant GSTR-1/3B, date of receipt of payment, date of annual return, and date of issue of the section 74 notice. These dates can determine whether the demand is time-barred altogether.
0 0 Sir,
You have not explained that when did work bill was raised for work done and when did the measurement was taken by the concerned engineer. These two are important aspects to prove the time of supply of service as required u/s 13. Further that any delay in processing your work bill or belated payment are not the criteria for application of rate of tax in terms of Sec. 14. The period of adjudication proceedings is another aspect in terms of time factor.
0 The rate of tax will depend on the time of supply. Further facts can help to deduce the time of supply. iF this is a continuous supply of service then the timelines in the agrement will be of importance to decide this.
The rate of tax applicable on the time of supply will decide the amount of liability.
TaxTMI 
TaxTMI 
The impugned notice is void ab initio and barred by limitation under Section 74(2) read with Section 74(10) of the CGST Act, as the statutory deadline for issuing a Show Cause Notice for FY 2018-19 expired on June 30, 2025, thereby divesting the proper officer of jurisdiction to initiate or adjudicate these proceedings.