GST Administration Sent Notices to Firms Regarding Low Sales

A scam has been recently revealed by the Good and Service Tax administration, it found that several businesses having businesses with an annual turnover of more than 5 crores wrongly declaring themselves to be below that threshold, to avail several compliance-related relaxations.

It is identical to a previous trend where businesses were under-reporting their turnover and investment size in order to get benefits means for Micro, Small and Medium Enterprises (MSMEs) View the impact of GST law on startups and SMEs (small and medium enterprises) in India. The tax will provide great relief to these companies (experts reveal). Read More. To deal with that Government enlarged the definition of such firms, the move also intended to encourage start-ups and other employment-intensive units to scale up. And the newly discovered trend is also underway among goods and services tax (GST) businesses.

In this case, the Good and Service Tax Administration sent notices to a large number of firms/ businesses / taxpayers stating that their compliance deadline would be rescheduled based on the tax department’s own calculation of annual turnover.

Since its inception, the GST council eased the compliance burden for smaller businesses. One of the changes the authority made was the requirement to file the GSTR-1 Form The complete guide for online filing GSTR 1 form in a very easy and step by step manner. We have explained its part 1 to part 13 with the original form screenshots only once in a quarter for those having a turnover of fewer than 1.5 crores.

Experts stated that this relaxation including those provided during or after lockdowns are attractive for businesses that just crossed the defined threshold in the previous financial year, to represent themselves under the turnover level.

However, one of the sent notice stats that “Your aggregate turnover for the financial year FY2019-20 has been computed by GST system based on returns filed in Form GSTR-3B by all registrations on the common PAN. The same has been found to be more than Rs 5 crore where returns of FY 2019-20 filed up to July 25, 2020, have considered for the said computation”. It further added that “computation would now be used by the GST system for certain validations in the system such as determining due date of return-filing and computation of late fee by the system. You can also use the same for reporting interest on delayed payments based on a self-assessment basis,”

As per the statement of Good and service tax law, “aggregate turnover is the total value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same PAN”.