No more leniency — Noncompliant taxpayers start receiving GST notices

Though the Goods and Services Tax (GST) Council was initially quite lenient, authorities have recently begun issuing noncompliance notices to taxpayers to help address gaps in data, increase tax revenue, and improve the timeliness of GST filing. 

Data gaps in GST returns and tax revenue 

As a brief measure, the council required taxpayers to file and pay taxes using the simplified form GSTR-3B until the IT glitches on the GST Network (GSTN) could be addressed. Once the glitches were fixed, taxpayers were to begin filing form GSTR-1 to report invoice-wise details instead. 

In March 2018, the council directed authorities to analyse data gaps between various GST returns to gauge tax evasion. The analysis examined returns filed from July to December 2017, comparing GSTR-3B data against GSTR-1. 

In GSTR-3B, taxpayers report consolidated figures of outward and inward supplies, then calculate the tax liability after considering the amount of input tax credit (ITC). GSTR-1, however, requires taxpayers to submit invoice-wise details of outward supplies. The GSTN then autogenerates form GSTR-2A (purchase return) on the basis of information filled in by suppliers on GSTR-1.

As a result of their research, analysts found that 34 percent of taxpayers had paid a whopping Rs. 34,400 crores less in taxes by continuing to file form GSTR-3B. GST authorities have begun issuing notices to them. 

Timely GST return filing 

The due date for filing GSTR-3B for April was 20 May, then it was extended to 22 May. However, many non-filers and late filers began receiving notices even before the deadline, directing them to file their returns within three days. 

According to GST rules, however, returns must be filed within 15 days from the notice date. Hence the time limit given by the notices contradicted the time limit established by GST rules. 

An easier way to file

Clearly, adhering to GST filing deadlines is taking on new importance, making the need for an automated solution like Avalara India GST even more urgent. Avalara India GST helps with:

• Validating GSTR-1 and GSTR-3B — With a single click, Avalara India GST can compare GSTR-1 and GSTR-3B. Once taxpayers have completed GSTR-1, they can run a report to look for any inconsistencies, thus eliminating the prospect of receiving a late notice.  
• Matching GSTR-2A and GSTR-3B — Matching GSTR-2A with GSTR-3B is very important in the GST framework in order to avail maximum ITC. Avalara India GST prepares a report to show the differences between GSTR-2A and GSTR-3B so taxpayers can coordinate with vendors to resolve them. 
• Complying with due dates — The Avalara support team duly reminds customers about approaching due dates. We send reminders via email to update taxpayers on when returns are due. 

GST authorities are merely getting started issuing notices to noncompliant taxpayers. Once the regular assessments begin, more notices may be issued and heftier penalties imposed. Hence, taxpayers benefit from using automated GST software to make the entire filing process more seamless. 

Avalara is an experienced application service provider (ASP) and partner of authorized GST Suvidha Providers (GSPs). To understand how our cloud-based application, Avalara India GST, can help you with GSTR-1 to -9, contact us through https://www1.avalara.com/in/en/products/gst-returns-filing.html.