Introduction to GST Notices
GST notices are typically used by GST authorities to communicate with taxpayers who are irregular in maintaining their taxes. Other than this, some of the other cases where GST notices are sent out are when they just want to collect some information from the taxpayer. Under GST notices, there are various such as SCN or show cause notice, demand notice, and scrutiny notice. The nature of the notice will decide on what action should be taken by the taxpayer.
|Common Reasons for Receiving Multiple GST Notices
|Strategies for Organizing Multiple Notices
|Understanding the Contents of GST Notices
|Responding to GST notices effectively
|Challenges face in Handling Multiple GST Notices
|Seeking Professional Assistance
Common Reasons for Receiving Multiple GST Notices
There are many reasons as to why you may be receiving GST notices. Out of these, a few of them are mentioned below:
- When there is any difference in input tax credit claims that were made in GSR–3B vis-a-vis GSTR- 2B/2A
- When the individual is told to get themselves registered under the GST Act but neither has registered nor discharged GST taxes.
- When there is a delay in filing returns, such as GSTR 1 and GSTR 3B returns repeatedly.
- When the interest on GST liability is not discharged
- When the GST is refunded mistakenly, irrespective of whether it is done with fraudulent intentions or not
- When there is no correct classification of either the goods or services provided or sometimes even both, which hence affects the levy of tax
- When the authorities require any kind of additional information from the records that the taxpayer maintained
- When a business is liable to obtain GST registration but has failed to do so and, as a result, has not discharged the tax and other liabilities under the very GST act
Strategies for Organizing Multiple Notices
When it comes to handling multiple GST notices, there is a specific set of strategies that you need to follow. All of them are mentioned below and discussed thoroughly:
The first step is to maintain a chronological order of the record-keeping system. It’s a time-saving process. To maintain a thorough record, ensure that all the documents that are even remotely related to GST, such as documents and returns, are organized in such a way that they are easily accessible.
Being Thorough With the Details
Before you respond to any GST notice, make sure that you know what its contents are. When observed, you will notice every notice comes with a purpose, so figure out the reason why it was issued. If you fail to understand the contents of the notice, then you may face problems in the long term run, and frankly, nobody wants that.
Segregation and Tracking
The next step is to segregate the GST notices in an organized way. You must create a tracking sheet, as notices that are even remotely related to GST come from various states. If not, you can always use notice management software to speed up the process. The whole motive of segregating and tracking is to ensure that you respond to these notices effectively, depending upon their types.
Reviewing And Rectifying
While reviewing the GST notices, if you notice anything that is even remotely related to the discrepancy, then don’t hesitate to ask questions regarding it. So, under this process, you need to not only review the records but also rectify them. After rectifying, make sure that the same mistakes don’t take place in the future.
After successfully carrying out the steps mentioned above, you are all set to respond to the notice, so make sure you do it effectively. GST notice response should be carried out strategically. One crucial thing here is that you don’t delay in responding because if you do that, then you will have to pay additional penalties. Furthermore, you can land in legal problems as well.
In a situation where you require more time to collect information and consult with professionals, it is recommended that you first acknowledge it and then move forward with any kind of necessary action.
Documentation in Every Step
Make sure you document all of the interactions that are taking place with the tax authorities, irrespective of whether they are taking place in emails, phone calls, or even letters. Simultaneously, keep a copy of your responses as well as any document that you submit. Doing this will greatly prevent you from future problems and can also act as solid evidence if any kind of dispute arises in the future.
It is important to understand that not all notices need the same level of priority. So you need to play it safe by prioritizing them purely based on the nature of the notices and the deadlines that they come with. For instance, the notices that demand prior attention are demand notices and show cause notices. As far as scrutiny notices are concerned, they usually can be responded to later as well. An easy way to consider deadlines is by maintaining a calendar.
Seeking Out Professional Help if Needed
At times, all of the GST notices can be complex to understand, and this is when professional expertise comes into play. With the help of the right professionals like chartered accountants, legal experts, and consultants, you will know how to manage the notices efficiently.
Understanding the Contents of GST Notices
To understand what GST notices, it is important to understand its contents, all of which are mentioned below:
GST notices can come in various natures and types, including notices for scrutiny of investigation, demand, returns, clarification of any kind of discrepancies, and more. So, you must understand the nature of the notice first before moving forward.
It is important to be thorough with the details of the taxpayers in the notices. There will be details regarding the address and legal name. So, the next step is to verify these very details. All of this will help you gain clarity about whether the notice has indeed been addressed to you or not.
Under this, the notice emphasizes the particular tax period. When you thoroughly understand the period, it will help you identify the relevant records along with the transactions that the tax authorities are looking forward to examining.
Grounds on Which it’s Issued
When you go through the contents of the notice, you will understand as to on which grounds the notice has been issued. Therefore, to construct a clear and comprehensive response, it is important to understand the grounds for notice.
At times, the GST notice demands specific documents so that it can act as evidence for the taxpayer’s transactions. So ensure the documents that are required and prepare them accordingly to prevent any kind of adverse situations.
Responding to GST Notices Effectively
When it comes to responding to multiple GST notifications, there is a set of chronological order processes that you need to stick to. All of the processes are mentioned below:
Accessing the Portal
Inevitably, the first step is to access the GST portal. In case you are registering for the first time, click on ‘Register Now’ and click on TRN or ‘Temporary Reference Number.’ After this, all you need to do is enter the TRN and give the asked mobile number or email OTP. However, if you are an existing user, all you need to do is just log in with your credentials, and you are all set.
Navigation to Registration Services
Under this, all you need to do is visit ‘Services’ and tap on ‘Registration.’ After this, tap on ‘ Application for Filing Clarifications.’
Locating the Notice
With the help of your reference number or Application Reference Number, locate the notice.
Responding to New Registration Applications
In this step, if under ‘modification in the registration application filed,’ ‘yes’ is selected, the original application will be displayed on the screen for editing purposes. Here, you can now make the necessary changes and then upload the required documents. However, if you see that ‘no’ is selected, then you will notice that an application is chosen with various queries. Here, you need to respond to the queries from the ‘query response ‘ section.
Submit the Additional Information
If you have any, then please add any additional information with the supported documents that will help address the concerns that are raised in the relevant notice.
Verify and Submit
Select the authorized signatory name along with the place from the drop-down list and verify the information. Now, as per the authentication method, choose either ‘ Digital Signature Certificate ‘ or ‘Submit With Electric Verification Code’ and finish the process.
Challenges Faced in Handling Multiple GST Notices
There are certain challenges that you may face while handling several GST notices, a few of which are mentioned below and discussed:
Need for Legal Assistance
Irrespective of how big or small the business is, everybody requires the right legal assistance to understand the whole complexity of GST notice. This is because only after understanding will you be able to respond effectively.
Complexity in Responding
If you are a business, you may find it troublesome to navigate while you are trying to respond. This is because the overlapping of procedures may confuse you at times and may stand as a challenge when it comes to handling several GST notices.
You need a plethora of time to conduct activities such as responding to notices. In terms of small as well as medium businesses, there may not be enough legal talent and manpower that is required to address issues. As a result of this, the business often diverges from its main motive.
Advocacy for Reforms
Most industry associations and business advocacy groups are wildly adopting reforms both in the procedural and legal fields of GST. The motive of these reforms revolves around the creation of business-friendly surroundings. All of this has been successfully carried out with the motive that entrepreneurs give all of their time to business growth rather than being diverted from legal issues.
Seeking Professional Assistance
When you seek professional assistance for managing your GST notices, you are at advantages, especially when you are dealing with multiple tax notices because of the following ways:
Deep Analysis of Notice
The one thing that tax professionals bring with them is a plethora of knowledge, wisdom, skills, and experience, which will make the whole job of managing GST notices extremely easy. When they get to work, they conduct a deep analysis to find out if there are any problems, discrepancies, or nuances.
Minimization of Risks and Liabilities
Since tax professionals have been involved in this line for years, they have a clear understanding of the risks and liabilities involved in managing GST notices. So, irrespective of financial or reputational level, they will leave no stone unturned in reducing the risks.
Ensuring Correct Documentation
There is too much documentation involved in GST notices, so it is important to be careful and provide the right one. This is where professionals come into play as they make sure that all the right documents are provided in the demanded systematic order.
A Solid Long-term Relationship
When you establish a long-term relationship with professionals, you are creating an important and valuable resource for tax compliance. The professionals will make sure that the business is all set to adapt if there are any changes in future law.
So, this was all about the GST management guide. From now on, ensure that you are careful with all the GST notices that you receive. It is extremely important for a taxpayer to respond to GST notices, as not responding can lead to serious legal troubles. So, as a good and noble taxpayer, it is recommended that you regularly reply to the GST notices that you receive, and you can do this by keeping a tab on the information in the GST portal.
Also Read: GST: Everything You Need To Know
Q1. How to maintain several GST notices at once?
Ans. You can prioritize notice, address notice based on deadlines and if needed, seek professional help as well.
Q2. When should I professionally help?
Ans. If you feel like the notice has very serious complex issues in it, you should seek professional help.
Q3. Is it mandatory to address each point in the GST notice individually?
Ans. It is important to give out a detailed response so yes, it is mandatory to address each point in the GST notice individually.
Q4. Is there any timeframe on which I should respond to several GST notices?
Ans. Yes, there will be a timeframe to which you should stick when it comes to responding to multiple GST notices.
Q5. What’s the procedure for arranging documents for several GST notices?
Ans. You need to consider the notice requirements to ensure the response process.
Q6. Can I ask for an extension for responding to GST notices?
Ans. If required, you can ask for an extension by submitting formal requests and waiting for approvals.
Q7. What are the naive mistakes I should avoid in managing multiple GST notices?
Ans. Some of the common mistakes that you should avoid are not paying attention to details, little to no communication, and responding without being thorough with the notice.
Q8. Is it possible to negotiate settlements for several GST notices?
Ans. Although negotiation is possible, it should be done after thoroughly consulting professionals.
Q9. How can I solve the discrepancy between several GST notices?
Ans. It is possible to solve discrepancies, however, you need to ensure that you submit the relevant documents.
Q10. How to deal if I disagree with some of the findings in the GST notices?
Ans. In such cases, you need to offer valid and supportive evidence. If necessary, you can also go for appealing.