CBIC mandates proof of intent to evade tax before invoking GST fraud provisions

Exam-focused facts from the 27 October 2026 current affairs briefing.

Key facts

The CBIC clarified that Section 74(1) or Section 74A(5)(ii) of the CGST Act cannot be invoked merely for non-payment of GST without specific evidence of fraud, wilful misstatement or suppression of facts with intent to evade tax.
A discrepancy noticed during scrutiny does not automatically establish fraud; scrutiny examines the records and the nature of the issue.
Show-cause notices must clearly set out the material evidence and the basis for invoking fraud, wilful-misstatement or suppression provisions.
Penalties under Section 74 range from 15 to 100 per cent of the tax amount, depending on payment timing relative to the show-cause notice.