GST Notice (Under Section 73)

First analyse the reason why it was supplied under exempt..if supply under exempt was correct then cite the reasons....if it was wrong and your outward supply was indeed taxable then GST has to be paid...it doesn't matter whether you claimed ITC or not nor does it matter whether or not you recovered gst from buyer..

You need to pay tax on value taxable supplies. Amount receipt will be treated as inclusive of GST.

Given the scenario, it appears the person has been dealing with taxable goods, but only reported exempted supplies since 2017-18, without availing any Input Tax Credit (ITC). The GST department has issued a notice for FY 2020-21, questioning the exempted sales of ₹10,30,562, as the purchases reflected in GSTR2A seem taxable at 12% and 18%. The department is demanding tax on ₹10,30,562 at 18%, but the person doesn't have any ITC balance in their Electronic Credit Ledger, since they didn't avail any ITC. In this case, the person should: - *Verify the exempted supplies*: Double-check if the supplies were indeed exempted, and if so, under which category (e.g., *absolute exemption*, *conditional exemption*, or *supplier-based exemption*).¹ - *Reconcile GSTR2A and GSTR1*: Ensure that the purchases reflected in GSTR2A match the exempted sales reported in GSTR1. - *Respond to the notice*: Provide a detailed response to the GST department, explaining the exempted supplies and supporting it with documentation. - *Consult a tax professional*: Seek guidance from a tax expert to ensure accurate compliance and to address any potential penalties. It's essential to address the notice promptly and provide a clear explanation to avoid any further complications.