The KGST Department has recently issued a circular no. 16/2023, under its authority in accordance with Section 168 of the Kerala State Goods and Services Tax (KSGT) Act, 2017 to establish a standardized issuance of notices under Sections 73 and 74. These sections deal with the determination of tax liabilities, where Section 73 applies to non-fraudulent cases, while Section 74 pertains to cases involving fraud or intentional misstatements.
To ensure the litigation system is subject-based, the Department will consider each subject matter independently and issue separate notices to taxpayers when in multiple cases, it requires tax determinations under both Sections 73 and 74. This move makes sure that each subject matter is handled with clarity and effectively during various processes like audits, intelligence, and taxpayer service processes.
Under Section 73(8) and Section 74 of the Act, it is crucial to keep in mind that the closure of proceedings under Sections 73 and 74 happens at the notice level, rather than the subject matter level. Combining subject matters falling under these sections into a single notice should be avoided, as it causes intricacies in the subsequent adjudication and closure procedures for each section.
Important: Issuance of SCN Under GST Section 73(10) with Time Limits
Furthermore, the circular states that under existing instructions and the provisions of Sections 73 and 74, It is essential to maintain the independence of adjudication and closure for each notice or proceeding associated with these sections.
