GST Notices & Rectification Handling and Appeal filing service

We at Gstmentor provides services on how to respond to GST notices and how to make correction in GST returns. Also we file appeal on behalf of clients and take necessary action.

GST Notices & Rectification handling services

Gstmentor provides services on how to file clarification and responses to the notice received in GST. When a taxpayer receives a notice, he is bound as per law to respond to the notice. In case of delay in filing or not responding to the notice can lead to further legal proceedings by the GST officer. We are a team of experts who have been handling GST notices and assessment cases, since the advent of Goods and Service Tax in India. 

GST rectification is referred to the cases where there is a difference in GST returns filed (GSTR-1 and GSTR-3B) along with GSTR-2B or GSTR-8 where the correction needs to be made. It happens when returns and books do not reconcile with each other or the liability paid by the taxpayer is not as per the provisions governing the CGST Act, 2017. Action needs to be taken to rectify these types of issues before GST officers. 

GST Appeal filing services

An appeal is filed against the demand order issued by the GST officer. When a taxpayer is dissatisfied with the conduct of the officer and objects to the liability determined by the officer.

Taxpayers can file an appeal to an appellate authority to take up the matter. We at Gstmentor guide our clients on how to file an appeal and on what grounds an appeal should be filed. Drafting of necessary documents required for appeal filing are prepared by us which are attached along with the form.

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What is a notice in GST?

Notice under GST can be a Show cause notice issued to the taxpayer for obtaining clarifications w.r.t to GST registration and cancellation. A scrutiny notice can be issued to the taxpayer or a demand notice can be issued. The reason for issuance of notice may vary and depend upon the nature of the default committed by the taxpayer. However, a response to the notice must be filed whatsoever the reason.

Taxpayers must promptly act and respond within the timelines provided in the notice. Failure to do so will allow the GST officer to take subsequent action and other legal proceedings.  Moving further, we shall discuss the notices received in GST which will bring more clarity.

What are the reasons for issuance of notice in GST?

Following are the reasons normally why GST notices are issued. Please note following is not an exhaustive list.

  1. Liable but has failed to obtain GST registration – A taxpayer was liable to obtain registration under the GST Act but failed to obtain the registration. When a taxpayer is liable to obtain the registration? A taxpayer is liable when the turnover threshold limits exceed as provided or when he falls under the category of obtaining mandatory registration. In case, he fails to obtain a GST officer on getting the information can issue a notice asking him to explain the reasons for failure.
  2. Delay in filing of GSTR-1 and GSTR-3B – A taxpayer can be issued a notice on failure to file GST returns like GSTR-1 and GSTR-3B. Normally, the GST portal automatically sends the notice to the taxpayer if he fails to file GST returns. However, a consecutive delay can attract a notice from the GST officer along with the tax liability calculated basis data available with the officer.
  3. Mismatch in details reported between GSTR-1& GSTR-3B – GSTR-1 and GSTR-3B should be reconciled and the values reflected in each return should match with the other in a consolidated way and separately for each nature and tax head. In case of major differences in the GST Returns, GST Officer can issue a notice to the taxpayer asking about the reasons for such differences in returns.  
  4. Inconsistent declaration in GSTR-1 and e-way bill portal – An e-way bill is created for the movement of goods and GSTR-1 is filed for reporting outward supplies. Both the government portal exchange data with each other and are integrated, in case there is inconsistency in generating e-way bills and reporting outward supplies in GSTR-1. GST Officer can issue a notice explaining the reasons for the same. 
  5. Differences in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2A/2B – The input tax credit is claimed in GSTR-3B return, however, the amount claimed in GSTR-3B should reconcile with GSTR-2B and should not exceed the amount appearing in GSTR-2B. In case of an excess claim, the GST officer can issue a notice to the taxpayer asking him to explain the reasons for claiming excess credit and reversing the same along with interest. 
  6. Non-payment of GST liability/ short-payment of the tax with or without the intent to defraud – This type of notice will be issued to the taxpayer when on outward supplies are reported higher in GSTR-1 and tax is not paid for them in GSTR-3B. In layman’s terms, tax liability that should have been paid has not been discharged by the taxpayer. 
  7. GST Refund wrongly claimed with or without the intent to defraud – Notice issued to the taxpayer for an incorrect claim for GST refund. 
  8. Anti-profiteering – Non-reduction of prices due to reducing GST Rates – Where there is a subsequent reduction in GST rate by the government the same benefit shall be passed on to the customer by a reduction in the price. In case the benefit is not passed to the consumers, the GST officer can levy a penalty, cancel the GST registration and issue a notice to the taxpayer for the same. 
  9. GST registration and Cancellation SCN – These types of notices are issued when a GST registration application or cancellation application is filed. They are more in the nature of queries or obtaining additional information from the taxpayer. Both shall be responded to for the application to proceed. Read: How to file clarification for GST registration SCN?

What are the type of notices issued and their timeline for filing responses?

Following is the list of notices issued under GST along with their due dates of filing a response and actionable if no response is filed within the time prescribed.

  1. GST REG-03 – Issued when clarification is required on the information provided in the new registration application or amendment of GST registration. Response to GST REG-03 is filed GST REG-04 within 7 working days of receiving the notice. In case, a response is not filed GST Registration application will be rejected. 
  2. GST REG-17 – Issued on why GST registration should not be canceled. Response to GST REG-17 is filed under GST REG-18 within 7 working days from the date of receiving the notice. In case, no response is filed, the cancellation application filed will be rejected.
  3. GST REG-23 – It is a show cause notice issued when why the cancellation of GST registration should not be revoked and the response for it is filed under GST REG-24 within 7 working days of receiving the notice. Non-filing the response will lead to the rejection of the application filed for revocation of cancellation.
  4. GST REG-27 – It is issued for the cases For cases relating to migration into GST from the VAT regime, for not making an application after obtaining provisional registration or not giving correct or complete details therein. Response to the notice will be filed under GST-REG-26. This notice used to be issued in the initial phase of GST. 
  5. GSTR-3A – It is issued for non-filing of GSTR-1 or GSTR-3B or GSTR-4 or GSTR-8. GST returns should be filed along with late fees and a response to the notice issued must be filed within 15 days of receipt of the notice. In case no response is filed, a penalty under section 122 and best judgment assessment can be undertaken. Read: How to handle GSTR-3A notice?
  6. GST-CMP-05 – It is a notice issued on the eligibility of a composition dealer. Justification needs to be filed in GST-CMP-06 within 15 days of receipt of the notice. Not filing any response will lead to a penalty under section 122 and an order under CMP-07 can be passed denying the benefit of the composition scheme.
  7. GST-PCT-03 – It is a show cause notice issued to GST practitioners for misconduct. Necessary justification needs to be provided within the timeline mentioned in the notice. Failure to do so can lead to the cancellation of the license.
  8. GST-RFD-08 – It is a show-cause notice issued on the rejection of the GST refund request. Response to which is filed in GST-RFD-09 within 15 days of receipt of the notice. In case no action is undertaken, a rejection order would be passed under GST-RFD-06.
  9. GST ASMT-02 – It is issued to obtain additional information for provisional assessment under GST. Response to it is filed under GST-ASMT-03 within 15 days of service of notice. Application filed would be rejected, in case no action is undertaken.
  10. GST-ASMT-06 – It is issued to obtain additional information for final assessment under GST. Response to it is filed under GST-ASMT-03 within 15 days of service of notice and in case no action is being undertaken order under GST-ASMT-07 would be passed.
  11. GST-ASMT-10 – It is a notice for intimating discrepancies in the GST return after scrutiny. The response needs to be filed under GST ASMT-11 giving reasons for discrepancies within the timeline prescribed or 30 days from the date of service of notice. Failure to do so will result in an ex-parte assessment. Read: Download and learn how to repond to GST ASMT-10
  12. GST-ASMT-14 – It is a notice issued for undertaking best judgment assessment. Action should be undertaken within the timeline prescribed or 15 days from the date of the notice, otherwise, assessment order ASMT-15 would be passed by the officer.
  13. GST-ADT-01 – It is a notice issued to conduct an audit under section 65 of the CGST Act, 2017. The taxpayer needs to produce records or meet in person the officer within the timeline prescribed in the notice. In case no action is being undertaken, it will be deemed that the taxpayer does not possess the necessary records and proceedings shall be initiated accordingly.
  14. GST-RVN-01 – It is a notice issued under Section 108 by the revisional authority. Reply needs to be filed within 7 working days of service of notice. Failure to do so will lead to an ex-parte judgment.
  15. GST-DRC-01 – It is a show cause notice issued for the demand of tax. The response needs to be filed in GST-DRC-06 and payment is made in GST-DRC-03 within 30 days. An order would be passed in case of failure to pay or respond to the notice.
  16. GST-DRC-10 – It is a notice issued for the auction of goods under section 79 (1) (b). The taxpayer needs to pay the outstanding demand as per GST-DRC-09. Failure to do so will allow the GST officer to proceed with the auction and sale of goods.

Other notices include GST-DRC-11, GST-DRC-13, and GST-DRC-16 where actionable is mentioned in the notice, and failure to do so results in prosecution and penalties.

What is the mode of sending notices under GST?

Section 169(1) of the CGST Act, 2017 states the different means of communicating the notices by the GST officer to the taxpayers. Notice can be issued in the following ways as described below.

  1. Hand-delivered either directly or by a messenger, including by a courier, to the taxpayer or his representative (manager, advocate, family member, etc.)
  2. By registered post or a speed post or a courier with an acknowledgment due, addressed to the last known place of the business of the taxpayer.
  3. Communication to the email address provided at the time of registration, as amended from time to time.
  4. Making it available on the GST portal after logging in. Most of the notices are issued online only and responses are filed online.
  5. By publication in a regional newspaper being circulated in the locality of the taxpayer based on the last known residential address.
  6. 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 found 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.

Thus, the taxpayer need not act upon the notice or communication if it is received in any other mode apart from what is notified by GST law from time to time.

What is referred to as the rectification of GST returns?

Rectification is referred to making corrections in GST returns (GSTR-1 and GSTR-3B). Ideally, these returns should reconcile with each other and liability should be reported correctly and in the right heads. Often, some of the other errors like incorrect reporting or unreconciled returns happen. To take corrective action one needs to analyze the root cause of incorrect reporting and take suitable steps in subsequent returns to avoid any demand notice from the GST officer. The process of identifying the root causes and errors in returns till correction is what we have been providing to our clients since the advent of GST. 

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