Facility to pay reduced penalty is now available on GST Portal: GSTN
In case Demand ID is created under Section 74 of the CGST Act, 2017, the GST Portal now allows reduced payment towards penalty, as per law.
A message is shown to the user, about the reduction in amount of penalty mentioned in the order, if he makes the payment within 30 days from the date of communication of the order and he is making full payment of tax and interest, stated in the order.
In such case penalty amount can be paid up to 50/o of the amount stated in the order and the balance 50/o of the penalty is waived off.

Section 74 of CGST Act,2017 – Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful misstatement or suppression of facts

Section 74 of CGST Act,2017 from bare act :
(1) Where it appears to the proper officer that any tax has not been paid or shortpaid or erroneously refunded or where input tax credit has been wrongly availed or utilisedby reason of fraud, or any willful-misstatement or suppression of facts to evade tax, he shallserve notice on the person chargeable with tax which has not been so paid or which has beenso short paid or to whom the refund has erroneously been made, or who has wrongly availedor utilised input tax credit, requiring him to show cause as to why he should not pay theamount specified in the notice along with interest payable thereon under section 50 and apenalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six monthsprior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the properofficer may serve a statement, containing the details of tax not paid or short paid or erroneouslyrefunded or input tax credit wrongly availed or utilised for such periods other than thosecovered under sub-section (1), on the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be service ofnotice under sub-section (1) of section 73, subject to the condition that the grounds reliedupon in the said statement, except the ground of fraud, or any willful-misstatement orsuppression of facts to evade tax, for periods other than those covered undersub-section (1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice undersub-section (1), pay the amount of tax along with interest payable under section 50 and apenalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment ofsuch tax or the tax as ascertained by the proper officer and inform the proper officer in writingof such payment.
(6) The proper officer, on receipt of such information, shall not serve any notice undersub-section (1), in respect of the tax so paid or any penalty payable under the provisions ofthis Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid undersub-section (5) falls short of the amount actually payable, he shall proceed to issue thenotice as provided for in sub-section (1) in respect of such amount which falls short of theamount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the said taxalong with interest payable under section 50 and a penalty equivalent to twenty-five per cent.of such tax within thirty days of issue of the notice, all proceedings in respect of the saidnotice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by theperson chargeable with tax, determine the amount of tax, interest and penalty due from suchperson and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a period offive years from the due date for furnishing of annual return for the financial year to which thetax not paid or short paid or input tax credit wrongly availed or utilised relates to or within fiveyears from the date of erroneous refund.
(11) Where any person served with an order issued under sub-section (9) pays the taxalong with interest payable thereon under section 50 and a penalty equivalent to fifty percent. of such tax within thirty days of communication of the order, all proceedings in respectof the said notice shall be deemed to be concluded.

Explanation 1.For the purposes of section 73 and this section,

(i) the expression all proceedings in respect of the said notice shall notinclude proceedings under section 132;

(ii) where the notice under the same proceedings is issued to the mainperson liable to pay tax and some other persons, and such proceedings againstthe main person have been concluded under section 73 or section 74, theproceedings against all the persons liable to pay penalty under sections 122,125, 129 and 130 are deemed to be concluded.

Explanation 2.For the purposes of this Act, the expression suppressionshall mean non-declaration of facts or information which a taxable person is required todeclare in the return, statement, report or any other document furnished under this Actor the rules made thereunder, or failure to furnish any information on being asked for,in writing, by the proper officer.

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