29 Feb Guidelines for Addressing Notices Regarding Penalty, Interest, and Late Fees from the GST Department
Taxpayers often experience apprehension upon receiving notices from tax authorities. This article outlines the reasons behind such notices, preventive measures to evade them, and the protocol for responding to notices from the GST department regarding penalties, interest, and late fees.
Reasons for Issuing GST Notices:
GST notices commonly arise due to the following reasons:
- Filing GST returns after the due date.
- Availing Input Tax Credit (ITC) beyond the stipulated time limit.
Time Limit for ITC Claims:
ITC on a particular invoice should be claimed by either the due date of filing the return for September of the subsequent financial year or the filing date of the relevant Annual Return, whichever comes earlier.
Procedure to Respond to GST Notices:
Upon receiving a notice, taxpayers should adhere to the following steps:
- Settle any interest liability for late tax payments as per Section 50 of the CGST Act.
- If the notice pertains to ineligible ITC, reverse the ITC by paying the equivalent tax amount along with applicable interest.
Steps to Respond to GST Notices:
- Log in to the GST Portal using credentials.
- Navigate to Services > User Services > My Application.
- Choose "Intimation of Voluntary Payment-DRC-03" under New Application.
- Select "Voluntary" as the Cause of Payment for notices without SCN numbers.
- Complete required details such as section number, Financial Year, and payment particulars.
- A challan will be generated for the entered amounts, offsetting balances from electronic cash and credit ledgers.
- Verify details, check the checkbox, enter the name of the authorized signatory, and create the challan.
- Follow subsequent steps based on the chosen payment mode, with the draft statement of Form DRC-03 available for download.
- Verify details again, check the checkbox, enter the name of the authorized signatory, and proceed to "File."
- Choose to file with DSC or EVC as applicable upon confirmation.
Note: Interest and penalty amounts are set off using the cash ledger balance exclusively.
Precautions to Avoid GST Notices:
To preempt notices and the ensuing procedures, consider the following precautions:
- Timely submission of all returns before their due dates.
- Ensure accurate declaration of all required details before filing returns.
- Claim ITC promptly within the statutory time limits.
- Avoid availing ITC that violates regulations.
Conclusion:
Maintaining compliance with GST regulations and promptly addressing any notices is crucial for taxpayers. Seek assistance from GST consultants or professionals to ensure timely responses to notices in accordance with departmental procedures.
No Comments