How To Tackle Challenges in GST Litigation

GST litigation refers to legal disputes or cases related to Goods and Services Tax (GST) between taxpayers and the tax authorities. These disputes may arise due to issues such as incorrect tax calculations, improper classification of goods or services, or non-compliance with GST regulations.

Types of Notices Under GST

There are several types of notices that can be issued under GST, including:

• Notices for Registration: These notices are issued by the tax authorities to businesses that are required to register for GST but have failed to do so.
• Notices for Suspension of Registration: These notices are issued to businesses whose GST registration has been suspended by the authorities due to non-compliance with GST regulations.
• Notices for Assessment: These notices are issued to taxpayers by the tax authorities to initiate an investigation into the correctness of their GST returns.
• Notice for Incorrect Refunds: These notices are issued to taxpayers who have claimed incorrect refunds under GST.
• Notices for Fake Invoices: These notices are issued to businesses that have issued or received fake invoices to evade GST.
• Notices for ITC-related issues: These notices are issued to taxpayers who have claimed incorrect Input Tax Credit (ITC) under GST.
• Subsequent Notice on Similar Issues: These notices are issued by the tax authorities if similar issues are identified in subsequent GST returns filed by the taxpayer.
• Notice for Non-payment of Tax: These notices are issued to taxpayers who have failed to pay GST on time or have paid less than the required amount.

How to respond to them

Responding to GST notices requires prompt and careful action to avoid penalties or legal consequences. Here are some steps to respond to GST notices:

• Read the notice thoroughly to understand the nature of the issue and the timeline for responding.
• Provide accurate and complete information related to the issue raised in the notice.
• Respond to the notice within the deadline mentioned in the notice to avoid penalties.
• Attach supporting documents, such as invoices, receipts, and bank statements, to prove your case.
• If you disagree with the decision of the tax authorities, you may file an appeal within the prescribed timeline.

How to file the First Appeal against Demand Order

The steps to file an appeal to the Appellate Authority on the GST portal:

Step 1: Log in to the GST portal using your login credentials.

Step 2: Once logged in, navigate to Services>User Services>My applications. On the 'My Applications' page, select the application type as 'Appeal to Appellate Authority' and click on 'New Application'. This will take you to the 'GST APL-01-Appeal to Appellate Authority' page.

Step 3: Select the order type as 'Demand Order' and enter the order number. Then, click on the search button.

Step 4: Next, select the one or more categories of the case under dispute from the drop-down list and click on the 'Add' button. The date of communication and period of dispute can be edited by the taxpayer.

Step 5: Upload annexure to GST APL-01 by clicking on the 'click here' link on the order page. The GST APL-01 template will be downloaded. Click on the 'Enable Editing' button and update the details in the annexure. Save the updated file as 'AplAnnexureTemplate.pdf' and upload the same.

Step 6: Update the disputed amount/payment details by clicking on the 'Disputed amount/Payment details' button on the order page.

• Enter the amount under dispute by classifying it as per the tax head, late fee or interest.
• The amount of demand created and admitted will be automatically displayed. Note that the demand admitted is equal to the demand created minus the amount disputed, and hence the amount of dispute cannot be more than the demand created.
• Enter the percentage value of the pre-deposit going to be paid, which is by default a minimum of 10% of the amount disputed. A lower percentage needs approval from the authority. Accordingly, the 'Details of Payment required' table is auto-filled.
• Enter the place of supply details for the amount of demand admitted.
• Pay using cash or ITC lying in the electronic ledger. The taxpayer can make the payment by either utilising the cash or the balance of ITC available for utilisation in the ledger.

Step 7: Add supporting documents if needed. Enter the document description and then choose the file for upload.

Step 8: Preview the application filed by clicking on the 'Preview' button. The PDF file will be downloaded. The applicant can view whether the details are correctly updated and then proceed to file.

Step 9: Finally, select the declaration checkbox and choose the authorised signatory. Enter the place and proceed to file. Click submit and proceed to file with DSC or EVC. On successful submission, a confirmation message will be displayed.

Steps to file Reply during an Appeal Proceeding

When a taxpayer receives an additional notice or order from the appellate authority during the appeal proceeding, they need to file a reply to the notice in order to present their case or arguments in response to the notice. Here are the steps to file a reply:

• Step 1: The first step is to log in to the GST portal using valid credentials. Then navigate to Services>User Services>View Additional Notices/Orders.
• Step 2: On the case details page of the particular Case ID, select the notice tab and then click on reply. A ‘Submit a reply to the notice’ page will open.
• Step 3: In this page, the taxpayer needs to upload the reply file containing their response to the notice. They can also upload supporting documents, if needed, to substantiate their reply. Once the files are uploaded, the taxpayer needs to check the verification checkbox to confirm that the information provided is true and correct.
• Step 4: After ensuring that all the details are correctly entered, the taxpayer needs to click on the ‘File Reply’ button to submit the reply.
• Step 5: A warning message may pop-up, asking the taxpayer to confirm the submission. Click proceed and then submit the reply using Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
• Step 6: On successful submission, an acknowledgement will pop-up on the screen, confirming the successful upload of the reply. It is recommended that the taxpayer takes a printout of the acknowledgement for future reference.

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