GST council has sent notices to numerous businesses for the peculiarities in their claimed input tax credit (ITC). It arrives post-investigation of the ITC through these firms, which revealed differences between their annual returns.
Under Section 150 of the CGST Act of 2017, the notices were issued that needed the assessees to provide a detailed return showing the cause for the “short reporting” of input tax credits.
“Short reporting” happens if the input tax credit claimed in the yearly return form (GSTR-9) is lower compared to the amount availed in the monthly forms (GSTR-3B or GSTR 2B). GSTR-3B is a monthly self-declared summary of GST returns, whereas GSTR 2B is an auto-generated form that lists eligible and ineligible ITCs for each month.
In January for the April to November period of 2023-24, the majority of these notices were being issued.
Businesses and experts argued that various notices are provided mechanically without verifying that the assessees have genuinely used the ITC, surging the compliance needs while the law permits the officials to ask for the information return.
“Various notices have directed the assessees to reverse even unclaimed ITC in GSTR-3B mechanically, without any vital analysis,” as per an expert, who examined the reason for reversing unclaimed ITC.
In a post-budget interview, Sanjay Kumar Agarwal, Chairman of the Central Board of Indirect Taxes and Customs, remarked that the administration could not overlook an ITC mismatch discovered in the system.
Read Also: GST Officials Issue Tax Demand Notices to 1500 Cos Due to Wrong ITC and Annual Returns
Understanding of GST Notices
A GST notice is an official communication dispatched by tax authorities to taxpayers concerning Goods and Services Tax (GST) matters. These notices may be issued for several reasons, including:
- To notify or admonish the taxpayer regarding any noncompliance with GST requirements, such as late return filing or tax payment.
- To request clarification or further details from the taxpayer regarding their tax filings.
- To commence penalty proceedings against the taxpayer due to non-compliance with GST laws.
- To notify the taxpayer about updates or modifications in GST laws or procedures.
Below are some extra considerations regarding GST notices:
- GST notices may be dispatched electronically or in hard copy format.
- You can access all the GST notices issued to you by logging in to the GST portal.
- If you disagree with the Good and Service Tax (GST) tax notice, you can file an appeal with the tax authorities.
