The Tax Department is prepared to conduct an investigation of more business premises regarding the payment of goods and services tax (GST). The search operation has already issued many show-cause notices to India Inc. and should be prepared to deal with more such notices.
As per the sources, more such GST notices have already been issued, and more are expected in the coming weeks. Tax experts suggest that the GST department is likely to issue additional notices as the limitation period for 2018-19 ends on December 31.
A tax expert said that numerous GST notices have been sent to registered individuals for FY18, about non-fraud cases. These notices are vaguely based on a comparison of GSTR 1, GSTR 2A, and GSTR3B with GSTR 9 and GSTR 9C, with a deadline of September 30, which was the given timeframe for issuing SCN under section 73 of the CGST Act for the financial year 2018. Therefore, for registered taxpayers, responding by December 31 is crucial to avoid any unilateral decisions, said the expert.
Further, he added that more notices will be issued before December 31, 2023, as the limitation period for show cause notices related to all non-fraud cases for FY19 comes to an end.
Companies receiving GST notices have been exploring their options, while industry and trade associations are yet to come to a conclusion on whether they should communicate their concerns to the government regarding this matter.
The issuance of these notices has raised concerns about the ease of doing business, as companies are being targeted simply to meet the September 30 deadline for GST payments, said another tax expert.
Dabur India, a prominent player in FMCG and ayurvedic products, recently disclosed that it received a GST demand notice amounting to Rs 320.6 crore. The company plans to challenge the notice by submitting a strong response to the relevant authorities.
Apart from the other sector, which is already under scrutiny, several other industries, including insurance and automobiles, have also received GST notices in recent months.
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Life Insurance Corporation of India was served a GST notice for allegedly paying tax at a lower rate of 12% instead of 18%, resulting in a demand order cum penalty notice of nearly Rs 37,000 crore for 2019-20.
Similarly, Maruti Suzuki, a major automobile manufacturer, received a show-cause notice proposing interest, penalties, and even after paying tax appropriately, totalling Rs 139.3 crore for the period from July 2017 to August 2022.
