GST Notices for FY 18, Thousands Come Under The Notice Claiming Shortfall in Payments (image: Pixabay)

The Tax authorities have sent Goods and Services Tax (GST) notices to thousands of taxpayers for the financial year 2018. The last date to issue notices is September 30 and a 30 days period has been given to the taxpayers to respond to the automated notices, reported the ET. The GST notices have been sent, claiming a shortfall in the payment of taxes for the FY18.

On this, a government official said that both the central and state GST officials have sent notices during the last fortnight. A person who was in the know said that the notices have been sent because of the mismatches seen in the GST output and liability, input tax credit, ineligible tax credit claims, and in the case of exempt supplies – reversal of credit.

Experts on the matters said that this could lead to a rise in litigation in the next coming three months and could also fall upon the cash flow of companies as they would have to set in 10% of the total liability as a deposit money in order to file an appeal. A tax expert said, “given that the adjudication deadline for these show cause notices is December 31, we are going to see a huge litigation glut in the next three months,” and, “ given that a deposit of 10% is necessary for appeal, a lot of money is going to be taken out of the cash flows of these industries,” reported the ET on this.

Another tax expert said that the notices seemed to have been sent without any proper analysis of the facts and figures involved. The authorities can send the notices even after September but for this, they would need clear evidence of tax evasion or fraud attempted by the tax payer.

The expert said that, many of these notices would be “dropped later”, leading to “avoidable disputes and paperwork for the industry. Going forward, the authorities may want to plan ahead so that these instances can be minimised.” He further said that “short payment of tax on party transactions, incorrect claims of input tax credit, export positions (including refunds granted), and state-wise credit availment and distribution are some of the common areas of disputes,” said the expert.