GST Notices

 GST Notices

GST Notices are official communications from GST Authorities to the taxpayers. They remind or caution the taxpayers of detected defaults in GST compliance or request additional information. Responses to the notices must be presented before the deadlines. Failure to do so may lead to legal consequences like prosecution or penalty for willful default. Therefore, taxpayers need to handle GST notices with care and ensure compliance.

At Returnfile, our experts are dedicated to helping you in dealing with the complexity of GST notices. If you have received a notice or feel that you will receive one soon, we are here to assist you in preparing and filing your response effectively.

Call us today for professional guidance and file a quick reply!

What is GST Notice?

GST Notices are formal communications made by GST Authorities to the taxpayers. Notices may be used to remind a taxpayer of a detected default under The GST law or seek further information from a taxpayer for appropriate action Per GST law. They form the crux of keeping tax compliance intact and smooth GST working.

These notices may go by different names, the specific type of notice depends on factors such as the nature of the default detected or the actions required from the taxpayer. Common grounds for receiving notices include failure to register under GST when required by law, late or non-filing of GST returns, underpayment or non-payment of GST, and incorrect claims of Input Tax Credit. Upon receiving a notice, taxpayers must respond promptly within the specified timeframe.

Types of GST Notices

As discussed above, in the context of Goods and Services Tax in India, taxpayers may receive various notices from the tax authorities. Some common types are:

Show Cause Notice (SCN): This is issued by the tax authorities to a taxpayer whenever they suspect that there has been a violation of GST laws or incorrect reporting of transactions. A valid explanation or justification has to be given within a certain period.

Demand Notice: A demand notice is given to the taxpayer when the tax authority calculates a tax liability payable by the taxpayer. The notice given includes the amount of tax due along with interest or any penalty that is applicable.

Scrutiny Notice: A scrutiny notice is issued to a taxpayer where the tax authorities carry out a detailed examination of the taxpayer's GST returns or other documents to check whether they have complied with the GST laws. This can involve a detailed examination of the records and transactions of the taxpayer.

Assessment Notice: This is issued after an assessment of the taxpayer's GST liability by the tax authorities. The liability amounts are determined based on the returns received from the taxpayer along with supporting documents, if available, and the assessment made in turn by the tax authority while computing the amount of the liabilities.

Recovery Notice: If the taxpayer does not pay the tax liability as demanded by the demand notice, a recovery notice may be issued specifying the outstanding amount and initiating steps for recovery including attachment of assets or bank accounts.

Notice for Personal Hearing: In some cases, tax authorities may summon the taxpayer for a personal hearing to present their case or provide additional information in response to any discrepancies or issues identified during the assessment or scrutiny process.

Taxpayers must respond to these notices in a prompt manner and furnish the necessary information and documents required by the tax authorities so that there will be no adverse consequences such as penalty or prosecution for non-compliance.

Reasons why GST Notice is Issued

The following are the major reasons why GST authorities issue notices:

Scanning notice due to mismatches in details declared in GSTR-1 and GSTR-3B.

Discrepancies in Input Tax Credit (ITC) claims declared in GSTR-3B vis-a-vis GSTR-2B/2A.

Failing to submit GSTR-1 and GSTR-3B for more than six months in sequential order.

Discrepancies between information submitted through GSTR-1 and the E-way bill portal.

No reductions in prices as a result of rate cuts on GST by the Central Board of Indirect Taxes and Customs, thus an action of profiteering which is also an infringement on consumers' rights to pass on reduced rate benefits.

Non-payment and underpayment of GST could result in an SCN whether or not made in the absence of fraudulent intent.

Ineligible claims for GST refund with or without fraudulent intent, which attracts SCN.

Incorrect creditability or utilization of Input Tax Credit.

Carrying on business without GST registration when necessary and not meeting tax as well as other liabilities under the GST Act.

Mismatch in export supplies declaration in GSTR-1 and those shipping or export bills lodged in ICEGATE but not reported in GSTR-1.

Failure to submit requisite record-keeping details to tax authorities.

Going through audits conducted by tax authorities.

 Failure to provide information returns to tax authorities in the stipulated time.