Common GST Litigation Notices and How to Handle Them

1. Common GST Litigation Notices and How to Handle Them Businesses follow various obligations daily under the evolving GST law. When handling indirect taxation, businesses must perform at the highest level. Since there are requirements for filing returns, tracking vendor data, and analyzing input tax credits, the e-way bill system and e-invoicing requirements have been introduced. No taxpayer or assessee enjoys hearing the terms tax assessments, litigation, and departmental audits. The act of filing a lawsuit in a court of law is formally referred to as litigation. The two main types of tax litigation are direct tax litigation and indirect tax litigation. In India GST litigation comes under indirect tax litigation. This article will cover the fundamental factors of GST litigation and how to handle them. What exactly is GST litigation? The term ‘GST Litigation’ refers to all legal actions involving the Goods and Services Tax (GST), including those involving the carryover of transitional credits from the previous indirect tax system, eligibility for input tax credits on a variety of goods and services, denial of refund claims, and nonpayment or underpayment of output tax liabilities. The other steps related to GST that businesses undertake include filing returns, claiming ITC, and receiving GST refunds. Any discrepancies in these end up turning into litigation. In case of discrepancies, taxpayers may undergo an IRS audit after the CA audit, which would involve verification of all their tax positions, payments, and compliances. As a result, taxpayers must be informed that penalties are levied if audits uncover defaults. If the taxpayer disagrees with the findings of the audit, they can seek to appeal. Such appeal processes are impartial and independent of the parties. Businesses must be aware of the finer points of Departmental Audits and GST Litigation, given the constantly changing nature of the GST law, to be adequately prepared to defend their positions. Given the sensitivity associated with litigations, the following are the most frequent industry pain points when handling disputes involving multiple GSTINs in a single legal entity or multiple entities in a group:

2. ●To keep a record of everything that is done. ●To routinely assess the readiness and development of the legal proceedings. ●To possess all the data/documents necessary for dealing with such legal actions directly from their source. It is essential to update the case files of these lawsuits with the most recent developments in judicial precedents and notifications/circulars, especially given that GST is an evolving law. Various types of notices the GST department can issue Pre-Litigation Notices under Section 61 Scrutiny of returns with analysis Section 65 Audit by tax authorities Section 66 Special audit Section 67 Power of inspection, search and seizure Section 70 Issuance of summons Litigation Notices under Section 73 Cases where there is no invocation of fraud/suppression/misstatement, etc. Section 74 Cases where the provisions related to fraud/suppression/mis-statement etc. are invoked. Section 76 The notice for the demand of tax that was collected but not deposited Additional Notices Regarding GST Litigation ●Credit Blocking Under Rule 86A: 20%/10%/5% Rule 2A of the ITC ●Notice pursuant to Section 79 for remitting an unpaid payment amount to a vendor to the department due to vendor default

3. ●E-Way Bills ●Investigations by Intelligence, preventative, anti-evasion, and CAG Guidelines for handling the GST Litigation Process To streamline various ongoing cases and litigation, the assessee can adhere to the procedure below. Review and analysis: Reviewing the Notice, Show Cause Notice (SCN), and Order, the business must check and confirm the notice or SCN it has received from the GST department. Briefing: The next step is to prepare the company brief, choose how to respond to the notice, and develop a strategy to defend the company at all costs. Compiling the necessary data, information, and reconciliations: To support your company's claim, you will need various documents, data, and related information that you must compile and present to the authorities. Verification: Validating and verifying the aforementioned data and information Response: Creating a suitable reply or appeal after thoroughly researching the relevant legal precedent. Reply/Appeal Submission: Once your reply or appeal is complete, you must submit it to the department. Appearance: Making an appearance before the adjudicating authority, commissioner, or tribunal is the final step, where you present your case and make an argument. Conclusion: The excessive number of notices that have been issued in recent days shows that taxpayers are not very familiar with the GST procedures. As a result, there are an excessive number of technical errors. Increased notices result in increased paperwork, litigation, and appeals, but these were not the GST's intended goals. Businesses must exercise caution, comprehend, comply with, and uphold the law's standards, and must seek the advice of their respective CAs to prevent any discrepancies.