Govt mulls new GST demand norms amid flood of notices

Informist, Wednesday, Feb 21, 2024

--ICAI official: Govt mulls new norms for issuing GST notices

--ICAI official: Govt formed panel to review spurt in GST notices

--ICAI official: Over 85% GST notices to cos are "baseless"

By Priyasmita Dutta

NEW DELHI - The government is working on new guidelines to issue goods and services tax notices to companies as the flurry of system-generated notices since September has spooked the industry, a senior official at the Institute of Chartered Accountants of India said today.

The new guidelines, likely after April, are intended to ensure that "baseless" GST demands are eliminated, the official said. The Central Board of Indirect Taxes and Customs has set up a committee with representation from the Institute of Chartered Accountants of India and the National Financial Reporting Authority to evaluate the tax notices sent to companies, the official told Informist.

"More than 85% of these notices sent to companies are bogus and baseless and are simply system generated. There is a need to know which notice is on correct ground and which is not," the official said on condition of anonymity. "Companies have been on their toes for the last few months because of the rampant notices."

The Institute of Chartered Accountants is a statutory body established under the Chartered Accountants Act and functions under the administrative control of the Ministry of Corporate Affairs.

In the last few months, state and central GST authorities have issued a flurry of notices to some of the biggest public and private sector companies, including Life Insurance Corp of India, Maruti Suzuki India, ICICI Bank, Hindustan Unilever Ltd, UltraTech Cement, and Bharti Airtel.

Though the GST authorities have sent notices worth over 2 trln rupees since September, the government is unlikely to get much revenue, the official said. "It is true some of this will come back, but most of the orders are being challenged and will be called off after paying a token penalty," the official said.

There has been a sharp rise in the demand for chartered accountants and audit firms in recent months because of the deluge of GST notices, the official said.

Informist reported in January that the sharp increase in the notices issued by GST authorities is mainly because of the deadlines for issuing show cause notices for the assessment years 2017-18 and 2018-19. Assessments for these two years were delayed due to the COVID-19 pandemic. Considering these were the first two years of a new taxation regime, there were a lot of discrepancies in the filing of returns due to lack of clarity, Informist reported. End

Edited by Vandana Hingorani

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