GST Notice

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GST Notices

GST Notices are official communications issued by GST Authorities to taxpayers. These notices remind or caution taxpayers about detected defaults in GST compliance or request additional information. Prompt responses within the specified timeframe are crucial to avoid legal consequences such as penalties or prosecution for willful default. Taxpayers must handle GST notices diligently and ensure compliance to maintain good standing.

At Mantra and Co, our team of experts is ready to assist you in navigating the complexities of GST notices. Whether you’ve received a notice or anticipate one, we can help you prepare and submit your response effectively.

What is a GST Notice?

A GST Notice is an official communication from GST Authorities to taxpayers. These notices are issued for various reasons, such as reminders of compliance defaults or requests for additional information. They play a critical role in ensuring tax compliance and the smooth functioning of the GST system.

GST notices serve different purposes, depending on the detected default or required taxpayer action. Below are some common reasons for receiving GST notices:

Failure to register under GST when required by law.
Late or non-filing of GST returns.
Underpayment or non-payment of GST.
Incorrect claims of Input Tax Credit (ITC).

Taxpayers must respond promptly within the specified timeframe upon receiving a notice.

Types of GST Notices

GST Authorities may issue various notices depending on the nature of the default or action required. Below are the common types of GST notices:

Show Cause Notice (SCN)

Issued when tax authorities suspect violations of GST laws or incorrect reporting of transactions. Taxpayers must provide a valid explanation or justification within the specified period.

Demand Notice

Issued when tax authorities determine a tax liability. It specifies the tax amount due, including applicable interest or penalties.

Scrutiny Notice

Sent when tax authorities scrutinize GST returns or other documents to ensure compliance. This may involve a detailed examination of the taxpayer’s records and transactions.

Assessment Notice

Issued after assessing a taxpayer’s GST liability based on returns and relevant documents. It specifies the final tax liability, including adjustments or corrections made by authorities.

Recovery Notice

Issued for outstanding tax dues following a demand notice. It may include steps for recovery, such as attaching assets or bank accounts.

Notice for Personal Hearing

Summons taxpayers to present their case or provide additional information to address discrepancies or issues identified during scrutiny or assessment.

Common Reasons for Receiving GST Notices

Here are some common reasons why taxpayers receive GST notices:

Discrepancies between GSTR-1 and GSTR-3B.
ITC mismatches between GSTR-3B and GSTR-2A/2B.
Non-filing of GSTR-1 and GSTR-3B for over six months.
Profiteering violations after GST rate cuts.
Incorrect refund claims or misuse of ITC.
Non-registration under GST despite eligibility.
Record-keeping issues or non-cooperation with audits.

Comprehensive Table of GST Notices and Actions

Sl. No.	Form-Notice Name	Description	Reply or Action	Response Time	Consequences of Non-Response
1	GSTR-3A	Default notice to non-filers of returns	File pending returns with late fees and interest	15 days from receipt	Tax assessed on available info; Penalty: ₹10,000 or 10% of due tax, whichever is higher
2	CMP-05	Show cause for composition scheme eligibility	Justify eligibility	15 days from receipt	Penalty under Section 122; CMP-07 order denying composition scheme benefits
3	REG-03	Request for clarification/documents for GST registration	Submit REG-04 response	7 working days	Application rejection in REG-05
4	REG-17	Show cause notice for registration cancellation	Submit reasons in REG-18	7 working days	GST registration cancellation in REG-19
5	REG-23	Notice for revocation of registration cancellation	Respond in REG-24	7 working days	Cancellation of revocation
6	RFD-08	Show cause for refund rejection	Respond in RFD-09	15 days from receipt	Refund application rejection in RFD-06

(Additional entries can be added for other notices.)

Reply to GST Notices

To respond effectively to GST notices, follow these steps:

Review the Notice: Understand the issue or discrepancy highlighted.
Gather Documentation: Collect relevant records and evidence.
Access GST Portal: Log in to prepare your response.
Use Digital/E-Signature: Authenticate your submission.
Clear Dues: Pay any dues specified in the notice.
Submit Response: File your reply with necessary attachments.
Maintain Records: Keep detailed records of all communications and submissions.

Consequences of Non-Response

Failing to respond to GST notices can lead to:

Monetary penalties.
Prosecution under GST laws.
Ex parte decisions based on available records.

Choose Mantra and Co for Expert GST Solutions

At Mantra and Co, we specialize in GST compliance, helping businesses with:

Effortless GST registration.
Accurate GSTR filing.
Expert handling of GST notices.

Our team ensures comprehensive and compliant responses, safeguarding your business with minimal disruption.

Contact Mantra and Co today for seamless GST solutions!

Frequently Asked Questions

What should be filed in the Letter of Undertaking (LUT)?

Exporters must declare their intent to supply goods or services without IGST payment and agree to comply with specified terms. It is filed using Form GST RFD-11.

Is it mandatory to record manually approved LUTs in online records?

Yes, all LUTs, including those approved manually, must be updated in the online GST portal for proper recordkeeping and compliance.

Who has to sign the LUT application?

The LUT application must be signed by an authorized person such as the proprietor, partner, or a director of the entity.

How would I know that the process of furnishing the LUT has been completed?

After submission, you can check the status on the GST portal. Upon approval, a confirmation message or email is sent, and the approved LUT can be downloaded from the portal.

Is it possible to view the LUT application after filing?

Yes, you can view and download the filed LUT application by logging into the GST portal and navigating to the “LUT” section.

Is it mandatory to file GST LUT?

Yes, it is mandatory for exporters opting for zero-rated supply without IGST payment to file a LUT.

What happens when the exporter fails to furnish the LUT?

If the LUT is not furnished, the exporter must pay IGST on their exports and later claim a refund, leading to cash flow issues and added paperwork.

Who is eligible to furnish LUT under GST?

Any registered taxpayer engaged in exporting goods or services is eligible, provided they have not been prosecuted for tax evasion exceeding ₹250 lakh.

Who is not eligible to furnish LUT under GST?

Taxpayers facing prosecution for tax evasion exceeding ₹250 lakh are ineligible and must furnish a bond instead of an LUT.

What documents are required for GST LUT filing?

Required documents include:

LUT cover letter
GST registration proof
PAN of the entity
KYC of the authorized person
GST RFD-11 form
IEC code copy (if applicable)
Cancelled cheque
Authorization letter for the signatory

What if the LUT is not furnished on time?

Without a valid LUT, exporters must pay IGST on their exports, leading to additional administrative steps to claim a refund later.

What is Form RFD-11?

It is the official form used to furnish a Letter of Undertaking (LUT) on the GST portal.