Goods and Service tax or GST, is form of comprehensive tax system that is applied on every step of sale and purchase of any goods or service. That means from the manufacturer to the final consumer at every step the item is being purchase
Goods and Service tax or GST, is form of comprehensive tax system that is applied on every step of sale and purchase of any goods or service. That means from the manufacturer to the final consumer at every step the item is being purchase/ sold or any service is being offered/ availed, the seller raises its bill stipulating the cost and the GST slab or percentage that is applicable.
Now the GST slab or the Goods and Service Tax rate on each product or service is different, it is based on the categorization or GST slab classification as provided by the government. This issue in this matter is that the interpretation of these classification, along with those ever-changing guidelines. Added to that, poor account management, improper and fraud billing, failed compliance and missing deadlines, often leads to conflict with the GST authorities.
GST litigation pertains to legal conflicts and processes that emerge within the framework of the Goods and Services Tax (GST). These conflicts may involve taxpayers, tax authorities, or both parties, and generally focus on matters like tax assessments, refunds, compliance, and the interpretation of GST regulations. Such litigation can take place at different stages, beginning with assessments by GST officers and extending to appeals in tribunals and higher courts.
GST litigation causes for various reasons, mainly due to the complexities and differing interpretations of GST laws. Some frequent reasons include:
Incorrect Classification- The GST system necessitates the accurate classification of goods and services to establish the correct tax rate. Misclassification can lead to the application of an incorrect tax rate, resulting in either underpayment or overpayment of taxes.
Examples: A product may be classified under a lower tax bracket instead of a higher one, such as labelling luxury items as necessities.
Valuation Issues- Valuation disputes occur when there is disagreement regarding the taxable value of goods or services. GST is calculated based on the transaction value, which should encompass all expenses incurred during the supply process.
Examples: Disputes may arise over whether discounts, incentives, or extra costs (like shipping) should be included in the taxable value.
Tax Rate Applicability- Conflicts emerge when there is uncertainty about the appropriate GST rate for specific goods or services. Misapplication of GST rates can lead to disputes and demands for additional taxes or refunds, resulting in litigation.
Examples: Confusion may arise over whether a food item is subject to a 5% or 18% tax rate.
Rejection or Delay of Refund Claims- Taxpayers seek refunds when they have overpaid taxes or are eligible for refunds due to exports or other zero-rated supplies. Disputes can occur when these claims are rejected or delayed without sufficient justification.
Examples: A business exporting goods may experience delays in receiving refunds for input taxes paid.
Eligibility Disputes- Disagreements may arise regarding whether a taxpayer qualifies for a GST refund. These disputes often center on whether the criteria for claiming refunds have been met.
Examples: Disputes may occur over eligibility for a refund due to an inverted duty structure or unutilized input tax credit.
ITC Reversals- ITC claims may be reversed if the conditions for claiming them are not fulfilled, such as failing to pay suppliers within 180 days or inconsistencies in returns. Reversal of ITC can impact a business's working capital and often leads to disputes with tax authorities.
Examples: A business might face an ITC reversal if the supplier does not submit the required returns.
Disallowed ITC- ITC claims can be disallowed for various reasons, including inadequate documentation, non-compliance with GST regulations, or discrepancies in records.
Examples: ITC claimed on purchases may be disallowed if they are later considered ineligible.
Non-filing or Late Filing- GST law requires timely filing of returns. Non-compliance can result in penalties and interest, leading to disputes.
Examples: Businesses may incur penalties for failing to file GSTR-3B on time.
Procedural Lapses- Procedural lapses involve mistakes in invoicing, documentation, or adherence to GST rules, leading to disputes.
Examples: Incorrectly issued tax invoices or failure to maintain proper records.
The GST litigation process generally consists of multiple stages, each with its own set of procedures and requirements. Familiarity with these stages is essential for effectively managing and navigating the litigation process.
1. Assessment and Adjudication
Initial Assessment: Tax authorities issue an assessment order based on the taxpayer's filed tax returns.
Show Cause Notice (SCN): If any discrepancies are identified, authorities send an SCN to the taxpayer, outlining the reasons for the proposed action.
2. First Appeal
Appeal to Appellate Authority: The taxpayer has the option to appeal against the assessment order or SCN to the Appellate Authority within a designated timeframe (typically 3 months).
Hearing and Order: The Appellate Authority holds hearings and issues a ruling based on the evidence and arguments presented.
3. Second Appeal
Appeal to Appellate Tribunal: If the taxpayer or tax authorities are not satisfied with the Appellate Authority's decision, they can appeal to the Appellate Tribunal (GSTAT) within a specified period (usually 6 months).
Hearing and Decision: The Tribunal reviews the case, conducts hearings, and delivers a decision.
4. Judicial Review
High Court: If there are significant legal questions, further appeals can be made to the High Court for judicial review, which must be filed within a specified timeframe (usually 180 days).
Supreme Court: The Supreme Court of India serves as the final level of appeal, addressing major legal questions or substantial issues of law.
5. Alternative Dispute Resolution (ADR)
Advance Rulings: Taxpayers can request advance rulings on specific matters to prevent future litigation. These rulings are binding on both the applicant and the tax authorities.
Settlement Commission: In certain situations, disputes may be resolved through the GST Settlement Commission, which aims for a quick resolution.
6. Resolution and Compliance
Implementation of Order: After a decision is reached at any stage, the taxpayer must adhere to the order, which may involve paying dues, reversing ITC, or taking other actions as instructed.
Follow-up Actions: If the order is unfavorable to the taxpayer, they may pursue further appeals or legal remedies in accordance with legal provisions.
The process of maintain records, and planning GST payment and claims can be very complex. Thus, it is humanly to make mistakes, therefore you must take advice of GST litigation experts. Lex N Tax Associates is a GST tax litigation firm, offering thorough assistance to resolve tax disputes and compliance challenges. Our skilled team addresses urgent GST issues, guiding businesses through controversies and safeguarding their rights. We manage various aspects of GST litigation, such as discrepancies in tax assessments, refund claims, and disputes over input tax credits. Our services encompass representing clients in GST appeals, overseeing search and seizure cases, and ensuring compliance with GST regulations in a timely manner.
We also deal with anti-evasion cases and assist with GST notices. Our firm keeps clients updated on significant changes and developments in GST law to protect their interests. With advanced infrastructure and technology, Lex N Tax Associates provides strong representation and support. Our experts, who hold qualifications across multiple jurisdictions, prepare necessary responses, appeal documents, and offer personal representation before tax authorities. We carefully analyze each case, evaluating its strengths and weaknesses, to construct solid legal defences. Also, our comprehensive services include managing GST refund claims, ensuring they are filed promptly and in compliance with regulations. Drawing on extensive experience from the previous tax system, we effectively handle all technical aspects of GST litigation, delivering top-notch GST litigation services in Delhi to help your business operate smoothly.
GST Related Problems faced by clients
Our firm is a collaborative team of lawyers, chartered accountants, tax consultants, company secretaries and several other professionals who provide specialized best GST Litigations Services in Delhi. Banking on their expertise, you can deal with several departmental inquiries and penalties from tax authorities. The experience in GST is a huge bonus as we support it with other comprehensive itineraries of services such as advisory, compliance, litigation and regulatory measures that are required to be fulfilled.
We lend our credibility to handle your GST litigation services in Delhi. Our support services are expertly capable of dealing with authorities at every phase of the case. The experience and expertise of having ling disputes and laws from the previous tax regime have been an efficient training ground for understanding every technical issue that your case holds. We also look into providing GST refund claims with our professional guidance and regular follow-ups on the same.
When we take up the GST litigation case, we look into all the aspects and work on building a watertight case that will enable us to gain from best GST litigation services in Delhi. We check into the GST annual returns regardless of the sales or profitability. Our experts check the validity of the GSTIN. The rule of 96A, the exporter has to give a letter of undertaking, the GST RFD-11, which is an affirmation of the exporter complying with the GST obligations if they don’t have IGST. We also look into whether you have filed your returns on time according to Government deadlines. It also means that the client requires GST compliant purchase and sales invoices that enable you to file the GST returns. We also check whether the client may not have a fixed address to operate and apply for temporary GST registration. All these aspects, as mentioned above, are important when filing a GST litigation which is considered while providing best GST litigation services in Delhi.
Dealing with GST authorities in GST Litigation
Lex N Tax Associates have specialized team that has been diligently put together to resolve all kinds of best GST litigation services in Delhi and provide other support services regarding the same. Our job is to chart out the pressing concerns you have with the department regarding GST law. Getting embroiled in these controversies has never been easy, but you will be able to continue doing business and fight for your rights with our support. Though we provide best GST litigation services in Delhi, we take up other support services such as this one and back you up to fight for your rights when you have search and seizure cases that hamper your reputation and goodwill.
We will enlighten you with all the major amendments and developments in the GST law while ensuring that your interests aren’t neglected as a taxpayer. Our firm has upped its ante to give you the best representation in all your GST litigations. Our firm handles all parameters related to the GST appeals that deal with the tax authorities. Moreover, our firm is equipped with the tremendous backup in the form of infrastructure and technology to provide GST litigation services. The firm also has expertise in handling anti-evasion cases which are part of our support services that we provide to clients. We also help you with providing a GST notice reply on your behalf.