GST: Key Concerns for Taxpayers

Even though it’s been six years since GST (Goods and Services Tax) was introduced, there are still several big problems causing worries for people who pay taxes. To avoid trouble, taxpayers and their tax experts need to be careful about certain things in the current GST system. Let’s take a closer look at these important issues:

1. GST Scrutiny & Audit: Tax authorities are closely examining many cases for various reasons, such as claiming too much tax credit, not paying enough tax, paying late fees, or having errors in tax data. They’re also conducting detailed audits of many taxpayers to check everything thoroughly. Taxpayers need to stay alert and respond to these notices, which are usually sent online. If they don’t reply, they might face decisions that go against them.

2. Filing Accurate GST Returns: It’s extremely important to file your GST returns on time and make sure they’re correct. Some taxpayers aren’t taking this seriously and are getting fined later on. For example, if you forget to report a sale in the same month, you might have to pay interest, even if you pay it later using tax credits. This rule can be tough on genuine taxpayers who make honest mistakes.

3. Timely GST Appeals: The tax department has issued many assessment orders against taxpayers, even when the taxpayers didn’t know about it. According to GST rules, you can appeal within three months, with a one-month grace period for delays. After this, you can’t appeal, no matter how good your reason is. Your only option then is to go to the High Court for help. So, be careful about orders against you and the deadlines for filing appeals.

4. Claiming Tax Credits Properly: There are lots of disputes about claiming tax credits. Problems arise when the supplier doesn’t pay their tax, cancels their GST number, doesn’t file their GST return, or if you claim tax credits for things you’re not supposed to. These problems are keeping honest taxpayers awake at night.

5. E-way Bill: Many cases involve penalties due to e-way bill violations. Mistakes in e-way bills, expired e-way bills or incorrect GST rates on e-way bills can lead to big fines and even the seizure of vehicles. So, when creating e-way bills, be extra careful and track them until the goods are delivered.

6. E-Invoicing: The requirement for e-invoicing now includes all businesses with a turnover of more than Rs. 5.00 Crore. This means many more businesses have to use e-invoices. If your supplier is supposed to use e-invoices but doesn’t, you won’t get the tax credits you deserve. So, make sure you receive proper e-invoices when they apply to your transactions.

7. Additional Business Locations: The tax department is checking if businesses have properly reported all their locations, like warehouses, on the GST Portal. Many businesses haven’t reported all the types of products and services they deal with either. This might happen because they don’t know better, but it can lead to serious problems.

8. HSN Classifications: The tax department is checking the classifications of products under the HSN code in many GST audits. It’s crucial for every taxpayer to correctly identify and classify their products instead of relying solely on suppliers or customers.

9. Proper Bookkeeping: Keeping good records and paying GST on all kinds of income, not just sales, is really important. Some taxpayers forget to pay GST on other income, like rent or money from selling things.

10. Linking Aadhar and Address Information: You need to link your Aadhar number on the GST Portal to do certain things, like getting a GST refund, reversing a GST cancellation, or filing GST appeals. Similarly, you must provide the correct location of your main place of business as needed by the portal.

In Conclusion:

GST was supposed to be a simple tax, but it can be tricky for people who don’t know the rules or don’t follow them properly. If you’re careful, stay informed, and follow the rules, you can avoid problems and have peace of mind when dealing with GST.