Gst Show Cause Notice

Demand and recovery can be initiated for short-levy, non-levy, short paid, non-paid, erroneous refund, wrong availment and incorrect utilisation of

input tax credit

. All demand and recovery proceedings under GST start with the issuance of a show cause notice. In this article, we look deeper into Gst Show Cause Notice.

When can one issue Show Cause Notice (SCN) under GST?

Show Cause Notice can be issued under

GST

, when an officer believes that there has been any of the following instances with respect to GST revenue or payment for the Government:

Short levy or Non-levy
Short paid or Not paid
Erroneous refund
Wrong utilisation of input tax credit

Time Limit for Issuing Show Cause Notice

GST Act specified a time limit for issuing show cause notice. The time limit for issuing show cause notice depends on whether the concerned individual involved with fraud or suppression.

If Fraud or Suppression is NOT Involved

If the concerned individual not involved with any fraud or suppression, the person can issue a show cause notice at least 3 months prior to the completion date of the adjudication. However, for issued show cause notices, it shall adjudicate within 3 years from the date of filing of annual return for the relevant year. The order must contain the tax liability, interest, and penalty to the maximum extent of 10% of the tax amount.

Involvement of Fraud or Suppression

If fraud or suppression is involved, Show Cause Notice must be issued at least 5 months prior to the date on which adjudication is supposed to be completed. If show cause notice is issued it needs to be adjudicated within 5 years from the date of filing of annual return for the relevant year. The order must contain the tax liability, interest, penalty to the extent of 100% of the tax amount. If the taxable person on his own ascertains his liability, he may pay the same along with interest and 15% penalty and intimate the officer.

Recovery of Dues by GST Department

The GST department shall proceed for recovery of the tax due upon confirmation of the GST liability remains unpaid and reflects no appeal against the order. Some of the methods used by the GST department for recovery of tax due could include:

Deduct the same from the refund due, if any.
Attachment of Bank Accounts.
Attachment of Debtors accounts.
Provisional Attachment of property, etc.

Penalty for Various GST Offences

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Frequently Asked Questions

Common questions about GST Show Cause Notice: Tax Compliance and Recovery.

A show cause notice under GST can be issued when a GST officer believes that there has been a case of short levy, non-levy, short payment, non-payment, erroneous refund, or incorrect utilization of input tax credit concerning GST revenue or payment to the government.

If the concerned individual is not involved in any fraud or suppression, a show cause notice can be issued at least 3 months before the completion date of adjudication. However, the adjudication must be completed within 3 years from the date of filing the annual return for the relevant year.

If fraud or suppression is involved, the show cause notice must be issued at least 5 months before the date on which adjudication is supposed to be completed. The adjudication needs to be completed within 5 years from the date of filing the annual return for the relevant year.

In cases involving fraud or suppression, the order must contain the tax liability, interest, and a penalty to the extent of 100% of the tax amount.

If a taxable person ascertains their liability on their own, they may pay the same along with interest and a 15% penalty and intimate the officer.

The GST department can recover dues by deducting the amount from any refund due, attaching bank accounts, attaching debtors' accounts, or provisionally attaching property.

If fraud or suppression is not involved, the order must contain the tax liability, interest, and a penalty to the maximum extent of 10% of the tax amount.

Yes, the GST Act specifies a time limit for issuing a show cause notice, which depends on whether the concerned individual is involved in fraud or suppression.

All demand and recovery proceedings under GST start with the issuance of a show cause notice.

Yes, a show cause notice can be issued under GST in cases of erroneous refund, where a refund has been granted erroneously or incorrectly.