NOTICE: Communication sent by GST Authorities to assesses is named as notice under GST.A notice can be called by different name. i.e., Show cause notice, demand notice, scrutiny notice etc.
The common grounds for receiving notices under GST are lapses on the part of the taxpayers such as not registering under GST when otherwise required under law, non-filing, or any delay in filing of GST returns, non-payment of GST or short payment of GST, excess Input tax credit claims, etc.
In the context of GST, the notice will require the taxpayer to provide a response or explanation within a specific period to rectify the issue or non-compliance. Failure to respond to the notice within the stipulated period could result in legal action being taken against the taxpayer. In summary, a notice is an official communication from the GST authorities to a taxpayer, highlighting any issues or non-compliance with the GST laws that require rectification.
Valid modes of sending GST Notices: –
Taxpayers must note the different modes of getting notices can be as follows:
1) Hand-delivering the notice either directly or by a messenger by a courier to the taxpayer or his representative.
2) By registered post or a speed post or a courier with an acknowledgement- addressed to the last known place of the business of the taxpayer.
3) Communication to the email address
4) Making it available on the GST portal after logging in.
5)By publication in a regional newspaper being circulated in the locality- that of the taxpayer based on the last known residential address.
If none of the above means is used, then by affixing it in some prominent place at his last known place of business or residence. If this is not founding reasonable by the tax authorities, they can affix a copy on the notice board of the office of the concerned officer or authority as a last resort.
The taxpayer need not act upon the notice or communication if it is received in any other modes apart from what is notified by GST law from time-to-time.
TYPES OF NOTICES
Under the Goods and Services Tax Law, there are multiple situations where we encounter the provision for issuance of show cause notice.
REGISTRATION AND CANCELLATION
Denial of option to pay tax under Section 10 GST-CMP-05
Under the GST Act, registered persons can opt for the Composition Scheme under Section 10, subject to certain conditions. However, if the proper officer has reasons to believe that a registered person was not eligible to pay tax under composition scheme or has contravened the provisions of the CGST Act, he may issue a notice in FORM GST CMP-05. This notice requires the registered person to show cause within fifteen days of receipt of the notice as to why the option to pay tax under composition scheme should not be denied.
Amendment of registration
Where the proper officer is of the opinion that the amendment sought under sub rule (1) is either not warranted or the documents furnished therewith are incomplete or incorrect, he may, within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14, serve a notice in FORM GST REG-03, requiring the registered person to show cause, within a period of seven working days of the service of the said notice, as to why the application submitted under sub-rule (1) shall not be rejected.
For cancellation of regular registration GST-REG-17
Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled, he shall issue a notice to such, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.
For rejection of application for revocation of cancellation of registration GST-REG-23
When a registered person’s GST registration is cancelled by the authorities, the person has the option to apply for revocation of cancellation of registration within thirty days from the date of the cancellation order. However, if the proper officer is not satisfied with the reasons provided by the registered person for revocation of the cancellation of registration, he can issue a notice in FORM GST REG-23 to reject the application for revocation.
The notice in FORM GST REG-23 requires the registered person to show cause within seven working days as to why the application for revocation should not be rejected. The registered person must provide sufficient reasons and supporting documents to prove that their registration should be reinstated.
If the proper officer is satisfied with the response provided by the registered person, he may revoke the cancellation of registration. However, if the proper officer is not satisfied with the response provided by the registered person, he may reject the application for revocation of cancellation of registration by passing an order in FORM GST REG-05.
It is essential for registered persons to comply with the GST provisions and ensure that their registration is not cancelled in the first place. In case of cancellation, they must provide sufficient reasons and supporting documents to prove their eligibility for revocation of the cancellation of registration.
For cancellation of provisional registration GST-REG-27
Under the GST Act, a person can obtain a Provisional Registration Certificate (PRC) to commence business before obtaining a permanent registration certificate. However, the provisional registration is subject to certain conditions, and if these conditions are not met, the proper officer may cancel the provisional registration. In such a case, the proper officer will issue a notice in FORM GST REG-27 to cancel the provisional registration.
The notice in FORM GST REG-27 will be issued to the registered person, and it will specify the reason for the cancellation of the provisional registration. The registered person must provide a response to the notice within seven working days from the date of the notice. The response should explain why the provisional registration should not be cancelled and provide any supporting documents if necessary.
If the proper officer is satisfied with the response provided by the registered person, the provisional registration may not be cancelled. However, if the proper officer is not satisfied, he may pass an order in FORM GST REG-28 to cancel the provisional registration. The registered person will be informed of the cancellation of the provisional registration through a notice in FORM GST REG-29.
RETURN
Notice to non-filers of returns
A notice in FORM GSTR-3A shall be issued, electronically, to a registered person who fails to furnish return under section 39 or section 44 or section 45 or section 52.
Section 39: Monthly returns (GSTR-3B and GSTR-1)
Section 44: Annual returns (GSTR-9 and GSTR-9A)
Section 45: Final return (GSTR-10)
Section 52: Collection of tax at source (TCS) by electronic commerce operators (ECOs) (Form GSTR-8)
REFUND
Rejection of refund claim GST-REF-08
Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies.
ASSESSMENT
Scrutiny of returns under Section 61
Where any return furnished by a registered person is selected for scrutiny, the proper officer shall scrutinize the same in accordance with the provisions of section 61 with reference to the information available with him, and in case of any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-10, informing him of such discrepancy and seeking his explanation thereto within such time, not exceeding thirty days from the date of service of the notice or such further period as may be permitted by him and also, where possible, quantifying the amount of tax, interest and any other amount payable in relation to such discrepancy.
Example of notice received during scrutiny of returns:
- Mismatch in details reported between GSTR-1 & GSTR-3B.
- Differences in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2A.
- Delay in filing of GSTR-1 and GSTR-3B.
- Inconsistent declaration in GSTR-1, e-way bill portal, E-invoice Portal.
- Business liable but has failed to obtain GST registration.
- 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
- Discrepancies in the amount of tax, interest, and any other amount payable as per the return furnished by the registered person and the information available with the proper officer.
- Non-disclosure or incorrect disclosure of turnover, taxable supplies, input tax credit, etc.
Assessment under Section 63 GST-ASMT-14
Notice issued to unregistered person during the Assessment Proceedings u/s 63.
REVISION
Notice to person and order of revisional authority in case of revision
Where the Revisional Authority decides to pass an order in revision under section 108 which is likely to affect the person adversely, the Revisional Authority shall serve on him a notice in FORM GST RVN-01 and shall give him a reasonable opportunity of being heard.
AUDIT
Audit by tax authorities (Notice regarding Conduct of the audit by tax authorities) – (Section 65)
Where it is decided to undertake the audit of a registered person in accordance with the provisions of section 65, the proper officer shall issue a notice in FORM GST ADT01.
Show cause notice under Section 73,74,76
Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason show cause notice is issued under the secion 73,74,75.
The basic difference between sections 73, 74 and 75 are presented in the following table:
| Sr.No. | Section 73 | Section 74 | Section 76 |
| 1 | No allegation of fraud, wilful misstatement or suppression. | Allegation of fraud, wilful misstatement or suppression. | Collection of amounts by way of tax and not paying to the Government is sufficient to invoke this section |
| 2. | Show cause notice shall be issued within 2 years and 9 months from the due date of filing of annual return. This is so even for those taxpayers for whom filing of annual return was made optional. | Show cause notice shall be issued within 4 years and 6 months from the due date of filing of annual return. This is so even for those taxpayers for whom filing of annual return was made Optional. | No time limit is prescribed for issuance of SCN. |
| 3. | The final order needs to be passed within the time limit of 3 years from the due date of filing of annual return or refund of input tax Credit. | The final order can be passed within the time limit of 5 years from the due date of filing of annual return or refund of input tax credit | The final order needs to be passed within 1 year from the date of issuance of SCN. |
| 4. | Statement of demand in lieu of show cause notice can be served. | Statement of demand in lieu of show cause notice can be served. | Only SCN is prescribed. No statement of demand. |
| 5. | Option for zero penalty is available when the disputed amount is other than self assessed tax or any amount collected as tax. | No question of zero Penalty. | No question of zero penalty. |
MISCELLANEOUS
For disqualification of GST Practitioner GST-PCT-03
If any goods and services tax practitioner is found guilty of misconduct in connection with any proceedings under the Act, the authorised officer may, after giving him a notice to show cause in FORM GST PCT-03 for such misconduct and after giving him a reasonable opportunity of being heard, by order in FORM GST PCT -04 direct that he shall henceforth be disqualified under section 48 to function as a goods and services tax practitioner.
Anti-profiteering
The Director General of [Anti-profiteering]208 shall, before initiation of the investigation, issue a notice to the interested parties containing, inter alia, information on the following, namely:-
(a) the description of the goods or services in respect of which the proceedings have been initiated; (b) summary of the statement of facts on which the allegations are based; and
(c) the time limit allowed to the interested parties and other persons who may have information related to the proceedings for furnishing their reply.
Non-reduction of prices due to reduced GST Rates with effect from the date notified by CBIC. Thereby, a default is committed by taxpayer (seller) for non-passing of the benefit of reduced prices (or GST rates) to the ultimate consumers. The practice is known as profiteering. Several anti-profiteering measures are taken by GST authorities to address the default.
Persons must comply with GST provisions to avoid receiving notices under GST, but if they do receive a notice, they must respond promptly to the communication to correct the issue or non-compliance. It is critical for taxpayers to understand that if a notice is received via a mode other than those specified by the GST law, it will be deemed invalid. They must ensure that they respond promptly to any notice received via a valid mode and provide the required response or explanation within the specified time frame to rectify the issue or non-compliance.
Disclaimer: 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.
Published on: July 31, 2023