Facing GST Audit Notices? Here’s Your Checkpoints and Responses

Introduction:

The Goods and Services Tax (GST) audit for the financial year 2017-18 introduced several complexities for businesses. One of the key aspects of this process is responding to notices from the GST department. In this blog, we’ll explore the types of notices that businesses may encounter during the GST audit for 2017-18, delve into their checkpoints, and discuss effective strategies for responding to the department.

Types of Notices:

• Demand Notices: Issued when there are discrepancies in tax payment or non-compliance.

• Audit Notices: Triggered for a detailed examination of a business’s GST records.

• Show Cause Notices: Served when the department seeks explanations for potential non-compliance.

Most common reasons for GST Notices

• Mismatch in details reported between GSTR-1 & GSTR-3B: scrutiny notice
• Differences in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2B/2A
• Delay in filing of GSTR-1 and GSTR-3B consecutively for more than six months
• Inconsistent declaration in GSTR-1 and e-way bill portal
• Non-payment of GST liability (tax) or the short-payment of the tax with or without the intent to defraud: show cause notice (SCN)
• GST Refund is wrongly made with or without the intent to defraud: show cause notice (SCN)
• The Input tax credit is wrongly availed or utilised.
• Inconsistencies in reporting of Exports in GSTR-1 with information available on  ICEGATE. For example, Shipping Bill or the Bill of export lodged on ICEGATE but not reported in GSTR-1
• Where information return was required to be furnished before tax authorities, but not submitted within the time limit stipulated.

Response Strategies:

• Thorough Documentation:
• Maintain a comprehensive record of all transactions and relevant documents.
• Organize documentation to facilitate a swift and accurate response.

• Professional Assistance:

• Seek guidance from tax professionals or consultants to formulate a robust response.
• Leverage expert advice to navigate complex issues highlighted in the notice.

• Clear Communication:

• Craft a clear and concise response, addressing each point raised in the notice.
• Demonstrate cooperation and a commitment to resolving any identified issues.

• Review and Rectify:

• Conduct an internal review to identify any shortcomings in compliance.
• Proactively rectify errors and implement corrective measures to prevent future discrepancies.

• Engage in Dialogue:

• If needed, engage in a constructive dialogue with the GST department.
• Seek clarification on specific points and provide additional information as requested.

Conclusion:

Facing GST audit notices for the financial year 2017-18 can be a challenging experience for businesses. By understanding the types of notices, carefully examining checkpoints, and adopting effective response strategies, businesses can navigate the audit process with confidence and ensure a collaborative relationship with the GST department. Remember, a proactive and informed approach is key to successfully addressing and resolving any issues highlighted in the notices.

This Article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc. if any.

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