A significant number of the show-cause notices issued to taxpayers under the GST regime in 2023-24 stemmed from data discrepancies in tax return filings, a senior indirect tax official said on Tuesday. Efforts are now underway to leverage technology to resolve these mismatches and ease the compliance burden for taxpayers
According to Shashank Priya, Special Secretary and Member (GST) of the Central Board of Indirect Taxes and Customs (CBIC), out of nearly 1.13 lakh show-cause notices issued last year, just 555 were related to classification disputes on tax rates. "Most of the disputes were linked to data verification issues, not policy-level disagreements," he noted.
An analysis by the CBIC revealed that six out of seven major areas of dispute were related to data discrepancies, including short payment of GST in GSTR-3B compared to GSTR-1 liability, excess input tax credit (ITC) claimed in GSTR-3B compared to ITC reflected in GSTR-2A, and non-payment of GST under the reverse charge mechanism (RCM).
To address RCM challenges, the GST Network is developing a new ledger system that will track all reverse charge liabilities, ensuring taxpayers cannot claim ITC beyond what is available, said Priya at Assocham's national GST conference. This new technological initiative aims to minimize disputes and reduce compliance challenges for taxpayers.
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