Towards the issuance of GST audit scrutiny notices under Section 74(A), tax experts and industry representatives raised concerns regarding bogus practices at the GST conclave, jointly organised by the Central GST (CGST) Ahmedabad Zone and the Gujarat Chamber of Commerce and Industry (GCCI).
The experts mentioned that these notices are to be reserved merely for the matters that comprise dubious or bogus activity. “The majority of scrutiny notices are being issued under Section 74(A) instead of Section 73, which applies to genuine discrepancies. This results in unnecessary penalties and denies taxpayers access to the amnesty scheme,” Deep Thakkar, co-chairman of GCCI’s indirect tax committee, mentioned.
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He asked CGST authorities to furnish section 74(A) notices merely in matters where the bogus is suspected instead of applying it as a blanket rule. To remove the need for manual processing and to request the quicker processing of the GST registrations, he asked for the digitisation of all the notices and orders.
Sunil Kumar Mall, chief commissioner of CGST Ahmedabad Zone, stated, “We’ve taken several steps to facilitate taxpayers and increased the number of officers for GST registration to ease the process.”
Sanjay Bansal, principal commissioner of CGST, Ahmedabad, while addressing the concerns of the industry, said that the GST will complete 8 years, and the government will continue to prioritise the streamlined operations of businesses, specifically in the MSME sector.
The stakeholders shall be assured by the CGST officials that the feedback from the conclave shall be considered, and the essential steps shall be taken to address the raised concerns.
CGST Section 73 for Non-fraud Cases
Section 73 of the CGST Act deals with situations where tax has not been fully or correctly paid, or where a tax refund was mistakenly issued. It also covers cases where input tax credit was wrongly claimed, provided these issues did not arise from fraudulent actions or deliberate suppression of information.
CGST Section 74A for GST Fraud Cases
GST Section 74A gives officers the power to send out notices for unpaid tax, short amounts, wrong refunds or GST input tax credits. They must do this within 42 months, except for payments less than INR 1,000. If someone makes a real error, they might face a tax penalty of 10% of the unpaid amount, or a minimum of INR 10,000. However, if there is proof of fake or intentional misrepresentation, the penalty can be as high as 100%.
