GST notices for past voluntary tax payments

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As the government steps up its offensive against fake invoice rackets, it has started asking taxpayers to explain various aspects of voluntary tax payments made since the goods and services tax (GST) was launched. This has upset the assessees who are dealing with the fallout of the pandemic.

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Under GST, a taxpayer can discharge any outstanding tax liability through a form called DRC-03. This is used by taxpayers to address short tax payment or for discharging liabilities in response to show cause notices from the department.

The GST administration is required to acknowledge such payments soon after it is made but many assessees told FE that they are getting notices since August even though the department never followed up due procedure after DRC-03 payments were made.

One of the notices seen by FE has asked the assessee to explain reasons for generating DRC-03 along with supporting documents including show cause notices, order and letters, among others. Further, it has also asked for ledger for the period DRC-03 has been generated.

In another notice, the department has asked for ‘calculation sheet prepared for the amount referred in DRC-03 and any other relevant document’. “Tax officers are responsible for acknowledging taxpayers’ payment in FORM GST DRC-03, which they did not undertake since 2017. After more than three years, tax officers are issuing a notice to re-check and re-calculate the voluntary payment of tax dues,” Rajat Mohan, senior partner at AMRG & Associates, said.

He added that assesses expect tax department to provide comfort to taxpayers in trying times rather than awarding them with a plethora of tax notices.

Tax officials said that the department was undertaking extensive intelligence operation to weed out fraudsters availing fake invoices, and it was possible that some of the commissionerates were sending such notices for gathering more information.

Till Wednesday, the intelligence wing of GST had arrested six persons including a woman in Chennai on charges of fake invoice circulation on Thursday, sources said.

On the seventh day of the nationwide drive against the practice of illegally availing input tax credit, the department has so far arrested 36 person which including three chartered accountants.

The directorate general of GST intelligence (DGGI) has so far booked 519 cases against 1736 identified entities, sources.

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