Reasons for the GST Department to send Notices
Following are the main reasons why the department can send notices to the taxpayers:
1) Default in Filing GST Returns
Revenue authorities across the country have started sending notices to the taxpayers who have not filed their GST Return within the time limit asking them to pay the taxes due and interest as penalty.
2) Mismatch in GST Returns
On the directions of the GST council meeting held in March to analyze data gaps between various GST returns, the department started sending various notices that are discussed below:
a. Various scrutiny notices have been issued to taxpayers to explain discrepancies in monthly summary return (GSTR 3B) and outward supply details (GSTR 1) for the same period. This is sent to verify the payment of taxes for all outward supplies made.
b. Although reconciliation has not been started by the government, but the department has started sending notices to seek an explanation for discrepancies in GSTR 3B and GSTR 2A. It is essential to ensure that credits claimed by businesses pertain to taxes actually paid by suppliers and hence no loss to government treasury on this account.
3) Verifying Pre-GST Claims
Department also initiated sending notices to taxpayers asking them to provide documents in support of transitional credit claims filed by them. They requested to furnish the copy of Tran 1 return along with stock statement and copies of purchase documents.
How we can assist you:
- Help taxpayers or entities to file GST Returns before due date effectively and efficiently. We validate maximum information to be filed in the returns like GSTIN, HSN code, tax rates and its calculation, the applicability of type of supply i.e intra-state and inter-state etc.
- Help taxpayers in preparing GSTR 1 i.e. Return for outward supplies and reconcile it with GSTR 3B so that tax liability shown in GSTR 3B matches with the final return for outward supplies (GSTR 1).
- We provide reconciliation as a service and help taxpayers resolve mismatches in the invoices filed by the supplier which are auto-populated in GSTR 2A and invoices recorded in purchase register, the solution is to take help of experts who have tools and workforce to take care of your reconciliation and avoid departmental notices and ultimately scrutiny assessments.
Some Relevant Sections
Section 61 of the Central Goods & Services Tax (‘CGST’) Act, 2017 provides for scrutiny of returns.
Rule 61(5) of the CGST Rules, 2017
How will officer Communicate?
8. Rule 99(1) of the CGST Rules, 2017 provides that notice for any discrepancy observed in accordance with provisions of Sec. 61 of the CGST Act, 2017 shall be communicated in FORM GST ASMT-10 (refer annexure for the form). On perusal of said form, one can observe that the officer is simply required to mention the discrepancy observed and allow time to the registered person to furnish explanation against such notice.
WHAT IS THE TIME LIMIT TO FURNISH AN EXPLANATION?
Law clearly provides for the minimum time limit of 30 days to submit an explanation. Further such period will start from the date of being communicated and not from the date of issuance of the notice. Hence the period will start from the date of receipt of a notice.
Rule 99(1) on the other hand provides that officer has to seek an explanation for the discrepancy within such time not exceeding 30 days from the date of service of notice or such further period as permitted by such office. Whether the word “serve” would mean the date of “issue” of notice or the date of “receipt” of notice
It may also be noted that Sec. 61(3) of the CGST Act, 2017 permits stipulated action only after 30 days whereas Rule 99(1) provides that officer may give a period shorter than 30 days for furnishing an explanation. Hence rule stipulating period lesser than 30 days runs contrary to Act.
GST notices can be very troublesome for every taxpayer but we ensure that you can avoid them with smart GST solutions provided by our certified group of experts.