Goods & Service Tax

A GST return is a document containing details of all income/sales and/or expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to file with the tax administrative authorities. This is used by tax authorities to calculate net tax liability. Under GST, a registered dealer has to file GST returns that broadly include: Purchases Sales Output GST (On sales) Input tax credit (GST paid on purchases) Businesses that are registered under GST have to file the GST returns monthly, quarterly, and annually based on the business. Here it is necessary to provide the details of the sales or purchases of the goods and services along with the tax that is collected and paid. Implementation of a comprehensive Income Tax System like GST in India has ensured that taxpayer services such as registration, returns, and compliance are in range and perfectly aligned. An individual taxpayer filing the GST returns has to file 4 forms for filing the GST returns such as the returns for the supplies, returns for the purchases made, monthly returns, and the annual returns. GST return filing in India is mandatory for all the entities that have a valid GST registration irrespective of the business activity or the sales or the profitability during the period of filing the returns. Hence, even a dormant business that has a valid GST registration must file the GST returns. Who should file GST Returns? GST Return filing in India is to be done by the following: A person having a valid GSTIN has to compulsorily file the GST returns. Also, a person whose annual turnover is crossing Rs. 20 lakh has to obtain a GST registration and file the GST returns mandatorily. In the cases of Special states, the limit for the annual turnover is Rs.10 lakh. Types of GST Registration What are the different types of GST registration in India? GSTR 1- Details of the outward supplies of the taxable goods and or services GSTR 3B-Simple returns in which a summary of the outward supplies along with the input tax credit that is declared and the payment of the tax is affected by the taxpayer. CMP 08-Statement cum challan to make a tax payment by a taxpayer registered under the composition scheme under Section 10 of the CGST Act. GSTR 4-Returns to be filed by the taxpayer that is registered under the composition scheme under Section 10 of the CGST Act GSTR 5-Returns to be filed by a Non-resident taxable person GSTR 6-To be filed by the input service distributor to distribute the eligible input tax credit GSTR 7-Is filed by the government authorities GSTR 8-Details of supplies that are affected through the e-commerce operators and the amount of tax that is collected at the source by them. GSTR 9-Annual return for a normal taxpayer GSTR 9C-Certified reconciliation statement GSTR 10-Is filed by the taxpayer whose GST registration is canceled GSTR 11-Details of the inward supplies are furnished by a person who has UIN and also claims a refund. Documents Required for GST Return Filing Invoices issued to persons with GSTIN or B2B invoices Invoices issued to persons without GSTIN or B2C invoices This needs to be submitted only when its total value is above ₹2.5 lakhs A consolidation of inter-state sales HSN-wise summary of all goods sold Any other debit or credit notes or advance receipts How to File GST Returns? Step 1: Visit the GST portal (www.gst.gov.in). Step 2: A 15-digit GST identification number will be issued based on your state code and PAN number. Step 3: Upload invoices on the GST portal or the software. An invoice reference number will be issued against each invoice. Step 4:  After uploading invoices, outward return, inward return, and cumulative monthly return have to be filed online. If there are any errors, you have the option to correct it and refile the returns. Step 5: File the outward supply returns in GSTR-1 form through the information section at the GST Common Portal (GSTN)  Step 6: Details of outward supplies furnished by the supplier will be made available in GSTR-2A to the recipient. Step 7: Recipient has to verify, validate, and modify the details of outward supplies, and also file details of credit or debit notes. Step 8: Recipient has to furnish the details of inward supplies of taxable goods and services in GSTR-2 form. Step 9: The supplier can either accept or reject the modifications of the details of inward supplies made available by the recipient in GSTR-1A. What is the penalty for the late filing of GST returns? f you have failed to pay the GST returns, there is an interest and late fee to be paid. The interest is at 18% per annum to be calculated on the amount of outstanding tax. And under the CGST and SGST, there is a late fee of Rs.100 to be paid each day, so the total comes to Rs.200 per day. GST Return Filing in india FAQ’s 1. What Happens If I Miss the Deadline? Missing GST return filing deadlines can lead to penalties and late fees. It’s crucial to file your returns on time to avoid unnecessary financial burdens. 2.What Documents Do I Need for GST Return Filing? To file your GST return, you’ll need invoices, debit notes, credit notes, and other relevant documents. Ensure that all these documents are accurate and in line with the GST law. 3.What is difference between GSTR-3 and 3B? GSTR-3 is a more comprehensive form that requires businesses to provide detailed information related to their sales and purchases, whereas GSTR-3B is a simplified form that requires only basic information.

Navigating the complexities of GST compliance in India involves understanding forms like GSTR 1A. This article delves into the significance of GSTR 1A, designed for correcting errors in previously filed GSTR 1 submissions. Discover who needs to file GSTR 1A, its filing deadlines, and the essential details it covers. Stay informed to ensure accurate reporting and avoid penalties under the GST regime. The GST Council in the 53rd GST Council Meeting held on 22.06.2024 recommended providing a new optional facility by way of FORM GSTR-1A to facilitate the taxpayers to amend the details in FORM GSTR-1 for a tax period and/ or to declare additional details, if any, before filing of return in FORM GSTR-3B for the said tax period.  This will facilitate taxpayer to add any particulars of supply of the current tax period missed out in reporting in FORM GSTR-1 of the said tax period or to amend any particulars already declared in FORM GSTR-1 of the current tax period (including those declared in IFF, for the first and second months of a quarter, if any, for quarterly taxpayers), to ensure that correct liability is auto-populated in FORM GSTR-3B. What is GSTR 1A? GSTR 1A is a form used under the GST regime in India, specifically designed for making corrections to details submitted in GSTR 1. Why is GSTR 1A important ? GSTR 1A allows taxpayers to rectify any discrepancies or errors identified after filing their GSTR 1. It ensures accurate reporting of sales and outward supplies to the GST authorities. Who needs to file GSTR 1A ? Taxpayers who have filed GSTR 1 and later discover discrepancies in their outward supplies details must file GSTR 1A to make necessary corrections. When should GSTR 1A be filed ? GSTR 1A must be filed by the 17th of the month following the tax period in which the discrepancies were identified. For example, if errors are found in April’s GSTR 1, GSTR 1A should be filed by May 17th. How to file GSTR 1A ? To file GSTR 1A, taxpayers need to log in to the GST portal, navigate to the ‘Services’ section, select ‘Returns’ and then choose ‘File GSTR 1A’. The corrections can be made in the relevant sections of the form. What details can be corrected using GSTR 1A ? GSTR 1A allows corrections in details such as invoices, credit or debit notes, and other adjustments related to outward supplies that were previously reported incorrectly in GSTR 1. Is there any penalty for not filing GSTR 1A ? Yes, there is a penalty for not filing GSTR 1A on time. Late filing can lead to fines and interest charges as per GST regulations, so it’s crucial to adhere to the deadlines. Can GSTR 1A be revised multiple times ? No, GSTR 1A can only be revised once for a particular tax period. Therefore, it’s important to ensure all corrections are accurately made in the first revision. Key takeaways about GSTR 1A: GSTR 1A is used for rectifying errors in GSTR 1 submissions. It must be filed by the 17th of the following month. Failure to file GSTR 1A on time can attract penalties. Corrections can include invoices, credit/debit notes, and other relevant details. It can only be revised once per tax period, so accuracy is crucial. By understanding and correctly filing GSTR 1A, taxpayers can ensure compliance with GST regulations and avoid unnecessary penalties. For more detailed guidance, consult the official GST portal or a tax professional to manage your GST filings effectively.

Sanctioned and working strength of Inspector in CGST & Central Excise (Jaipur Zone), Jaipur as on date is as under: Sanctioned Strength of Inspectors are 573 Working Strength of Inspectors are 497* *Includes 41 Inspectors working in Jaipur Zone as on date on deemed loan basis. Role of Inspectors in GST Inspectors play a crucial role in the Goods and Services Tax (GST) regime, primarily in ensuring compliance, preventing tax evasion, and facilitating smooth tax administration. Here are some key aspects of their role: Verification and Inspection: Inspectors are responsible for verifying the accuracy of GST filings and compliance with GST laws by taxpayers including verification of registered address at the time of GST Registration in Jaipur. They conduct inspections of business premises, records, and accounts to ensure that the correct amount of tax is being paid and reported. Audit and Assessment: Inspectors conduct audits to verify the correctness of GST returns filed by taxpayers. They examine financial records, invoices, and other documents to assess whether the taxpayer has followed the provisions of the GST law. Investigation of Offences: Inspectors investigate cases of suspected tax evasion, fraud, or other GST-related offences. This includes examining discrepancies in returns, mismatch in input tax credit claims, and other irregularities. Facilitation of Compliance: Apart from enforcement, inspectors also play a role in educating taxpayers about GST compliance requirements. They provide guidance and assistance to businesses in understanding their obligations under GST and help them comply effectively. Enforcement of Law: Inspectors have the authority to take enforcement actions against non-compliant taxpayers. This may include issuing notices, conducting raids or searches (with proper authorization), seizing goods, and imposing penalties where necessary. Assistance in Dispute Resolution: Inspectors may assist in the resolution of disputes between taxpayers and tax authorities. They provide relevant information and documents during the dispute resolution process to facilitate a fair and quick resolution. Collection of Information: Inspectors gather information on various aspects of GST compliance and administration. This information helps in policy formulation, improving compliance mechanisms, and identifying areas of concern that may require regulatory changes. Coordination with Other Authorities: Inspectors often collaborate with other law enforcement agencies and regulatory bodies to tackle issues such as cross-border tax evasion, smuggling, and other related offences that impact GST compliance. In summary, inspectors in the GST framework serve as key enforcers and facilitators of compliance. Their role is pivotal in maintaining the integrity of the GST system, ensuring fair tax collection, and supporting the overall objective of creating a transparent and efficient indirect tax regime.

Browse by Topic Income Tax e-Filing 53rd GST Council Meeting GST Registration Online: Documents Required, Limit, Fees, Process, Penalty Complete Online Document Submission & Application Tracking Filing of Application for GST Registration Secure GST Temporary Reference Number Dedicated CA to process your registration end to end Completely Online – No need to visit office CA Assisted GST Filing for all your  GST needs What is GST Registration Under Goods And Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration. For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offence under GST and heavy penalties will apply. GST registration usually takes between 2-6 working days. Team B K Goyal & Co LLP can help you obtain GST registration faster in 3 easy steps. Who should obtain the GST registration? Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.) Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be Casual taxable person / Non-Resident taxable person Agents of a supplier & Input service distributor Those paying tax under the reverse charge mechanism A person who supplies via an e-commerce aggregator Every e-commerce aggregator Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person All about the GST registration process GST registration can be obtained on the GST portal. One must apply for GST registration in Form REG-01 on the GST portal following steps outlined in our article “How to apply for GST registration?”. However, the GST registration services at B K Goyal & Co LLP helps you to get your business GST registered and obtain your GSTIN. Our CA Firm will guide you on the applicability and compliances under GST for your business and get your business registered under GST. Documents Required for GST Registration PAN of the Applicant Aadhaar card Proof of business registration or Incorporation certificate Identity and Address proof of Promoters/Director with Photographs Address proof of the place of business Bank Account statement/Cancelled cheque Digital Signature Letter of Authorization/Board Resolution for Authorized Signatory GST Registration Fees GST Registration is a tedious 11 step process that involves the submission of many business details and scanned documents. Although there are no fees prescribed under the GST law for obtaining GST registration on the GST portal on your own, you can save a huge time and effort by purchasing the GST registration plan with B K Goyal & Co LLP. You can opt for B K Goyal & Co LLP GST Registration services where a Chartered Accountant will assist you, end to end with GST Registration. Penalty for not obtaining GST registration An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000. The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes Rolling out of bio-metric based Aadhaar authentication on All-India basis The GST Council in 53rd GST Council Meeting held on 22.06.2024 recommended to roll-out the biometric-based Aadhaar authentication of registration applicants on pan-India basis in a phased manner. This will strengthen the GST Registration process and will help in combating fraudulent input tax credit (ITC) claims made through fake invoices by taking fake GST Registration. GST Registration FAQ Is GST registration mandatory?Yes, you are required to obtain GST registration once your turnover exceeds the specified threshold limits. Click on the hyperlink to read more about the latest GST registration limits. Am I allowed to submit applications for multiple GST registrations?If a business operates from more than one state, the taxpayer should obtain a separate GST registration for each state. For instance, If an automobile company sells in Karnataka and Tamil Nadu, he has to apply for separate GST registration in Karnataka and Tamilnadu respectively. Can I get multiple GST registrations within a state?Yes, a business can apply for any number of GST registrations within a state. The procedure of allocating multiple GST registrations only for different business verticals within a state has been removed for ease of business. Who can register for the composition scheme under GST? Small taxpayers who wish to have lesser compliances to deal with and lower rates of taxes under GST, can opt for the Composition scheme, A trader whose aggregate turnover is below Rs 1.5 crore can opt for the Composition scheme. In the case of North-Eastern states and Himachal Pradesh, the present limit is Rs.75 lakh. Click here to know all about the Composition scheme. Also, the government extended the Composition scheme to service providers having an aggregate turnover of up to Rs.50 lakhs. Click here to go through the Composition scheme for service providers. What turnover should be considered for the GST registration threshold limit?Aggregate turnover should be taken into consideration to calculate turnover. Aggregate turnover means the aggregate value of all taxable supplies excluding inward supplies liable to reverse charge, but including exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same PAN, to be computed on an all-India basis. It is to be noted that CGST, SGST, UTGST, IGST and cess should be excluded while calculating aggregate turnover. What are the benefits of registering under GST? A. For normal registered businesses: Take input tax credit Conduct interstate business without restrictions Click on the link to know more about the Benefits of GST B. For Composition dealers: Limited compliance Lesser tax liability Less impact on working capital Click on the link to know more about the composition scheme C. For businesses that voluntarily opt-in for GST registration (Below Rs.40 lakhs*) Avail input tax credit Conduct interstate business without restrictions Easily register on online & e-commerce websites Get a competitive advantage compared to other businesses Click on the link to know more about voluntary registrations What

The Indian government has decided to make GST e-invoicing mandatory for firms whose turnover exceeds Rs 5 cr via central tax notification number 10/2023. The GST council has recommended the GST e-invoice limit and the new rule has already been effective voluntarily from August 2023 as per the notification no. 10/2023 – Central Tax. GSTN recently issued a new advisory to mandate generating GST e-invoices from 1st April 2024. Latest Updates for GST E-invoicing 5 Crore Limit GST Advisory for E-invoice system transition is mandatory for assesses with turnover between 5 to 10 crores.  GST E-invoice Limit for B2B In Oct 2020 GST E-invoicing (electronic billing) was initiated and was made essential for companies that have a turnover of Rs 500 cr or exceeds, The same limit was drawn down lower to Rs 100 cr and then after that, it gets Rs 50 cr in 2021 for the business-to-business (B2B) transactions. The assessee should generate the invoices on their internal system or billing software and then notify the same to the invoice registration portal (IRP) — a requirement to get an input tax credit (ITC). Understanding the E-Invoicing System Electronic invoicing, or e-invoicing, refers to the generation, sharing, and storage of invoices in electronic form. It eliminates the need for physical invoices and facilitates the seamless exchange of invoice data between businesses and tax authorities. The e-invoicing system in India operates through the GST Network (GSTN) platform. The GSTN acts as the central hub for processing and validating invoices. It allows businesses to generate standardized electronic invoices in the specified format. The Need for E-Invoicing E-invoicing has gained momentum globally as a reliable and efficient method of generating, sharing, and storing invoices electronically. By digitizing invoicing processes, businesses can eliminate manual errors, reduce processing costs, and ensure accurate and consistent data entry. The e-invoicing system enhances compliance by recording transactions electronically, reducing the scope for tax evasion. It also fosters transparency by enabling real-time invoice exchange and quicker resolution of discrepancies. It helps promote seamless data integration among various stakeholders. Additionally, expanding the e-invoicing system will contribute to the government’s broader agenda of creating a digital economy. By encouraging businesses to adopt electronic invoicing, the government aims to reduce the dependency on paper-based processes and promote sustainable practices. Moreover, implementing e-invoicing will align Indian businesses with global standards and practices. Many countries have already adopted electronic invoicing as a mandatory requirement. India’s move towards e-invoicing demonstrates its commitment to staying abreast of international business trends and fostering a favourable investment climate. This alignment will facilitate smoother trade interactions with international partners and enhance India’s competitiveness in the global marketplace. Recognizing these benefits, the Indian government introduced the e-invoicing system in October 2020 for businesses with an annual aggregate turnover exceeding INR 500 crore. GSTN Preparation for New Portals A GSTN would execute the process of empanelling at least six enrollment portals to ease the higher volumes of transactions. The same would have one invoice registration portal for all the businesses. Invoice registration services will be uninterrupted by increasing portals as they provide adequate IT infrastructure and an ecosystem. In addition, it allows taxpayers to choose between different portals’ services. Moreover, it aids in balancing the load on any IRP portal that faces challenges due to long queues due to heavy load.” A GST official said last week that the GST Council had been informed of the development of the empanelment to increase the portals and had approved the move. As per the official data, of the 219,000 eligible, GST identification numbers (GSTINs) with a turnover lying between Rs 20 crore and Rs 50 crore, 153,000 would generate the invoices. Likewise, those who have a turnover of Rs 50-100 crore generate 48,217 invoices among the 86,963 GSTINs Key Features of the E-Invoicing System Unique Invoice Reference Number (IRN): Each e-invoice generated under the system is assigned a unique IRN. The IRN serves as a digital identifier for that invoice. Uploading invoice details to the GSTN platform will help generate the IRN. The platform then validates and generates the IRN along with a digitally signed QR code. QR Code: The QR code contains essential details of the invoice. Scanning the QR code can help verify the authenticity and integrity of the invoice. It enables quick and easy validation by businesses, tax authorities, and other stakeholders. Real-Time Reporting: E-invoices are reported to the GSTN platform in real-time, allowing seamless integration with the GST system. This ensures that invoice data is readily available to tax authorities for verification and compliance purposes. Previous Turnover Limit – Mandatory E-invoice for businesses with the above Rs.10 Crore Turnover During the fifth phase, the previous turnover limit for mandatory e-invoicing under GST in India was set at INR 10 crore on October 1, 2022. This means that businesses with an annual aggregate turnover exceeding INR 10 crore must generate and report their invoices electronically using the e-invoicing system. All enterprises with an annual turnover exceeding INR 10 crore must create e-invoices for all B2B transactions. For your information, the initial phase, launched on October 1, 2020, targeted businesses with an e-invoice turnover exceeding Rs. 500 crores. Subsequently, the second phase, commencing on January 1, 2021, extended the requirement to companies with revenues above Rs. 100 crores. The third phase, initiated on April 1, 2021, encompassed businesses with turnovers exceeding Rs. 50 crores. As part of the fourth phase, set to begin on April 1, 2022, the government expanded the electronic invoicing system to include Indian businesses with e-invoice limits ranging from Rs. 20 crores to Rs. 50 crores. Revised Turnover Limit To further expand the scope of e-invoicing and enable more businesses to leverage its advantages, CBIC has revised the turnover limit. Effective August 1, 2023, the new turnover limit for mandatory e-invoicing will be INR 5 crore. Businesses whose annual turnover exceeds INR 5 crore must use the e-invoicing system for business-to-business (B2B) supply of goods/services and exports. FAQs Is e-invoicing mandatory for a 5 crore turnover? Yes, e-invoicing will become mandatory for a 5 crore turnover business on or after 1st August 2023. What

All goods and services transacted in India under GST are classified under the HSN code system or SAC Code system. Where services are classified under SAC Code and goods are classified under HSN Code. Services Accounting Code also called as SAC Code is a classification system for services developed by the Service Tax Department of India. Using GST SAC code, the GST rates for services are fixed in five slabs namely 0%, 5%, 12%, 18% and 28%. SAC Code finder How do I carry out a SAC Code Search? You will need a SAC Code finder to find the SAC code for the given service. But there are also other ways to decode SAC code for a given product such as by visiting Central Board or excise and customs department website and other third-party apps on play store and iOS platform. Why do I need a SAC Code finder? Indian Taxation System has categorized roughly over 120 services for levy of GST under 5 broad categories or tax-slabs. These are 0%, 5%, 12%, 18% and 28%. SAC Codes under GST SAC Group SAC Code SAC Service Description Section 5: Construction Services Heading No.9954 Construction services – GST Rate for Construction Services Group 99541   Construction services of buildings    995411 Construction services of a single dwelling or multi-dwelling or multi-storied residential buildings   995412 Construction services of other residential buildings such as old age homes, homeless shelters, hostels etc   995413 Construction services of industrial buildings such as buildings used for production activities (used for assembly line activities), workshops, storage buildings and other similar industrial buildings   995414 Construction services of commercial buildings such as office buildings, exhibition & marriage halls, malls, hotels, restaurants, airports, rail or road terminals, parking garages, petrol and service stations, theatres and other similar buildings.   995415 Construction services of other non-residential buildings such as educational institutions, hospitals, clinics including veterinary clinics, religious establishments, courts, prisons, museums and other similar buildings   995416 Construction Services of other buildings n.e.c   995419 Services involving Repair, alterations, additions, replacements, renovation, maintenance or remodelling of the buildings covered above.       Group 99542   General construction services of civil engineering works   995421 General construction services of highways, streets, roads, railways and airfield runways, bridges and tunnels   995422 General construction services of harbours, waterways, dams, water mains and lines, irrigation and other waterworks   995423 General construction services of long-distance underground/overland/submarine pipelines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works.   995424 General construction services of local water & sewage pipelines, electricity and communication cables & related works   995425 General construction services of mines and industrial plants   995426 General Construction services of Power Plants and its related infrastructure   995427 General construction services of outdoor sport and recreation facilities   995428 General construction services of other civil engineering work n.e.c.   995429 Services involving Repair, alterations, additions, replacements, renovation, maintenance or remodelling of the constructions covered above.       Group 99543   Site preparation services   995431 Demolition services   995432 Site formation and clearance services including preparation services to make sites ready for subsequent construction work, test drilling & boring & core extraction, digging of trenches.   995433 Excavating and earthmoving services   995434 Water well drilling services and septic system installation services   995435 Other site preparation services n.e.c   995439 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.       Group 99544   Assembly and erection of prefabricated constructions   995441 Installation, assembly and erection services of prefabricated buildings   995442 Installation, assembly and erection services of other prefabricated structures and constructions   995443 Installation services of all types of street furniture (e.g., bus shelters, benches, telephone booths, public toilets, etc.)   995444 Other assembly and erection services n.e.c.   995449 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.       Group 99545   Special trade construction services   995451 Pile driving and foundation services   995452 Building framing & Roof Framing services   995453 Roofing and waterproofing services   995454 Concrete services   995455 Structural steel erection services   995456 Masonry services   995457 Scaffolding services   995458 Other special trade construction services n.e.c.   995459 Services involving Repair, alterations, additions, replacements, maintenance of the constructions covered above.       Group 99546   Installation services   995461 Electrical installation services, including Electrical wiring & fitting services, fire alarm installation services, burglar alarm system installation services.   995462 Water plumbing and drain laying services   995463 Heating, ventilation and air conditioning equipment installation services   995464 Gas fitting installation services   995465 Insulation services   995466 Lift and escalator installation services   995468 Other installation services n.e.c.   995469 Services involving Repair, alterations, additions, replacements, maintenance of the installations covered above.       Group 99547   Building completion and finishing services   995471 Glazing services   995472 Plastering services   995473 Painting services   995474 Floor and wall tiling services   995475 Other floor laying, wall covering and wallpapering services   995476 Joinery and carpentry services   995477 Fencing and railing services   995478 Other building completion and finishing services n.e.c.   995479 Services involving Repair, alterations, additions, replacements, maintenance of the completion/finishing works covered above.       Section 6: Distributive Trade Services; Accommodation, Food & Beverage Service; Transport Services; Gas & Electricity Distribution Services       Heading No. 9961   Services in wholesale trade Group 99611       996111 Services provided for a fee/commission or contract basis on wholesale trade       Heading No. 9962   Services in retail trade Group 99621       996211 Services provided for a fee/commission or contract basis on retail trade       Heading No. 9963   Accommodation, Food and beverage services Group 99631   Accommodation services   996311 Room or unit accommodation services provided by Hotels, INN, Guest House, Club etc   996312 Campsite services   996313 Recreational and vacation camp

As the Indian economy grows, the importance of tax compliance and management has only increased. However, with this growth, tax disputes and litigation are becoming more common. If you’re facing tax litigation, it’s important to understand the process and steps you can take to manage the situation effectively. GST is a comprehensive indirect tax levied on the manufacture, sale, and consumption of goods and services, and non-compliance can result in substantial penalties and interest charges. In this blog, we will provide a comprehensive guide to managing GST litigation in India, including the steps involved, the key players involved, and the common challenges faced by businesses. What is Tax Litigation in India? Tax litigation refers to the legal process that involves disputes between taxpayers and tax authorities over the interpretation, application, and enforcement of tax laws. Tax litigation typically involves the resolution of disputes arising from assessments, penalties, and other tax-related issues. GST litigation, specifically, refers to legal disputes that arise from the application of the Goods and Services Tax (GST) in India. GST is a consumption tax that is levied on the supply of goods and services in India. GST litigation may involve disputes over classification of goods and services, calculation of tax liability, application of GST exemptions and concessions, and other issues related to the administration of GST in India. Types of Tax Litigation The term ‘litigation’ is explained as the procedure of taking a matter in a court of law and taking legal action. Mainly, there are two types of tax litigation; Direct Tax litigation and  Indirect Tax litigation The Litigation relating to GST falls under the category of “Indirect Tax litigation” in the country. Reasons for GST Litigation Different interpretation of Law: The GST Act is a complex piece of legislation, and its provisions are open to different interpretations. This leads to confusion and disagreement between taxpayers and tax authorities on the applicability of GST on various transactions. For example, there may be conflicting opinions on whether a particular supply of goods or services is exempt from GST or whether it attracts a higher rate of GST. This can result in disputes and litigations. Incorrect opinion: Taxpayers may receive incorrect opinions from tax consultants, which may result in non-compliance with GST laws. For example, a consultant may provide incorrect advice on the classification of goods or services, leading to incorrect GST returns being filed. In such cases, taxpayers may be penalised, and litigations may ensue. Mismatch in returns: In some cases, there may be a mismatch between the returns filed by taxpayers and the data available with the tax authorities. This can happen due to errors in data entry or misinterpretation of the GST laws. The tax authorities may initiate proceedings against taxpayers for non-compliance, leading to disputes and litigations. Judgement of Supreme Court: The Supreme Court of India has given several landmark judgements on GST, which have set the tone for GST litigation in the country. For example, the Supreme Court has ruled on the applicability of GST on works contracts and the scope of input tax credit. These judgements have significant implications for taxpayers and tax authorities, and their interpretation may lead to disputes and litigations. Circulars of CBIC: The Central Board of Indirect Taxes and Customs (CBIC) issues circulars to provide clarity on various provisions of the GST Act. In some cases, the circulars may not be clear enough, leading to confusion and disagreement on the interpretation of the law. For example, there may be conflicting opinions on the applicability of GST on discounts or rebates, leading to disputes and litigations. Amendment in Act – Retrospective: GST laws are subject to frequent amendments, and some of these amendments may have retrospective effects. This means that the changes in the law may apply to transactions that have already occurred. This can lead to disputes and litigations as taxpayers may not be aware of the changes in the law and may have taken incorrect positions in their GST returns. Types of Notices issued by the GST department Notices are issued by the GST department at various stages. Mainly these stages can be categorized into three parts: pre-litigation notices, notices during litigation, and other miscellaneous notices. The provisions that provide such notices have a combination of different sections by the help of which the authority clears such matters. They are listed as below; Pre-Litigation Notices: Following are the provisions that fall within the purview of Pre-Litigation Notices; Section 61: Scrutiny of Returns Section 65: Notice for Conducting Audit (by tax authorities) Section 66: Special Audit by Chartered Accountant (who is appointed by Tax authorities) Section 67: Inspection, Seizureand Search Section 70: Summons Notices during Litigation Section 73: Show Cause Notice under Normal Period for Demand. It can be issued within 33 months from the due date of the GSTR-9  Section 74: Show Cause Notice under Extended Period for Demand. It can be issued within 54 months from the due date of the GSTR-9 Section 76: Notice for the demand of collected Tax which is not deposited Other Notices (Miscellaneous) Section 79: Notice when there is an outstanding amount due to the default of a Vendor  E-Way Bill Notices Investigations by CAG, Intelligence, Preventive or Anti-Evasion Stages of GST Litigation in India Audit and Assessment: The first stage of the GST litigation process is the audit and assessment of the details submitted by the taxpayer at the time of return filing. This involves a review of the taxpayer’s returns, invoices, and other relevant records. The tax authorities may also conduct an on-site inspection or GST departmental audit to verify the taxpayer’s compliance with the GST laws. After reviewing the records, the tax authorities may issue a Show Cause Notice if any discrepancies have been found. Objection: If the taxpayer disagrees with the assessment or audit, they have the right to file an objection with the tax authorities within the prescribed time limit (mostly 7 to 30 days) of the assessment. This must be done in writing, and the taxpayer must provide a detailed explanation of the grounds for the objection. Adjudication: If the objection is not resolved, the matter will be referred to the Adjudicating Authority for a final decision.

According to Notification No. 38/2023- Central Tax dated 4th August 2023, the CGST Rules, 2017 were updated to include Rule 88D, accompanied by FORM GST DRC-01C. The introduction of Rule 88D, following its recommendation in the 50th Meeting of the GST Council, addresses a critical concern – the disparities that may arise between GSTR 2B and GSTR 3B. What is Rule 88D? | Rule 88D Simplified The newly introduced Rule 88D outlines the process for addressing differences between the input tax credit claimed in the return filed using FORM GSTR-3B and the input tax credit available in the auto-generated statement provided in FORM GSTR-2B for a given tax period. If the input tax credit claimed in GSTR-3B exceeds that available in GSTR-2B by an amount recommended by the Council, the registered person will be notified electronically and via email. The person must then either pay the excess credit amount with interest through FORM GST DRC-03 or provide an explanation on the common portal within seven days. Upon receiving the notification, the registered person can choose to pay the excess credit amount and detail it on the common portal or provide an explanation for any remaining unpaid amount. Failure to comply may lead to the amount being demanded as per section 73 or section 74 of the regulations. Extract of Rule 88D The new Rule 88D reads as under “Manner of dealing with difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return. (1) Where the amount of input tax credit availed by a registered person in the return for a tax period or periods furnished by him in FORM GSTR-3B exceeds the input tax credit available to such person in accordance with the auto-generated statement containing the details of input tax credit in FORM GSTR-2B in respect of the said tax period or periods, as the case may be, by such amount and such percentage, as may be recommended by the Council, the said registered person shall be intimated of such difference in Part A of FORM GST DRC01C, electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference and directing him to— pay an amount equal to the excess input tax credit availed in the said FORM GSTR-3B, along with interest payable under section 50, through FORM GST DRC-03, or explain the reasons for the aforesaid difference in input tax credit on the common portal, within a period of seven days. (2) The registered person referred to sub-rule (1) shall, upon receipt of the intimation referred to in the said sub-rule, either, pay an amount equal to the excess input tax credit, as specified in Part A of FORM GST DRC01C, fully or partially, along with interest payable under section 50, through FORM GST DRC-03 and furnish the details thereof in Part B of FORM GST DRC-01C, electronically on the common portal, or furnish a reply, electronically on the common portal, incorporating reasons in respect of the amount of excess input tax credit that has still remained to be paid, if any, in Part B of FORM GST DRC-01C, within the period specified in the said sub-rule. (3) Where any amount specified in the intimation referred to in sub-rule (1) remains to be paid within the period specified in the said sub-rule and where no explanation or reason is furnished by the registered person in default or where the explanation or reason furnished by such person is not found to be acceptable by the proper officer, the said amount shall be liable to be demanded in accordance with the provisions of section 73 or section 74, as the case may be.” Action required by taxpayer You then have two options: Pay the excess credit amount with interest U/ s 50 through FORM GST DRC-03, or Explain the reasons for the difference on the common portal. If you receive this notification and fail to act, the outstanding amount might be demanded according to section 73 or section 74 of the rules. Time Limit The time limit that has been prescribed for a taxpayer to take any action is within 7 days. 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