FY18 Tax Alert: Thousands of Taxpayers Receive GST Notices

• GST authorities in India have sent out thousands of notices to taxpayers, claiming they haven't paid enough taxes for the FY18. The deadline for issuing these notices is September 30.

• Taxpayers have been given 30 days to respond to these automated notices, which mainly concern issues like mismatches in GST output and liability, incorrect input tax credit claims, and reversing credits for exempt supplies.

• Both central and state GST authorities have sent these notices over the last two weeks.

• Tax experts anticipate that this will lead to increased litigation over the next three months. Companies will also be affected as they'll need to deposit 10% of their total liability to file an appeal.

• The deadline for adjudicating these show cause notices is December 31, leading to a surge in litigation in the coming months.

• Tax authorities can continue sending notices after September 30, but they must prove cases of 'tax evasion' or 'fraud' by the taxpayer.

• Some experts believe that many notices have been issued without proper analysis of facts and figures, and some of them may be dropped later, causing unnecessary disputes and paperwork for businesses.

• It's suggested that authorities should plan better to minimize such instances in the future.

• Common areas of disputes include short payment of tax on related party transactions, incorrect input tax credit claims, issues with export positions and refunds, and discrepancies in state-wise credit utilization and distribution.

Source - https://economictimes.indiatimes.com/news/economy/policy/thousands-of-taxpayers-get-gst-notices-for-fy18/articleshow/104051941.cms