Goods and Service Tax

How to Reply GST Summon? – An Overview

calendar09 Feb, 2023
timeReading Time: 5 Minutes
GST Summon

Goods and Service Tax (GST) is a crucial component of the Indian Tax system and plays an important role in the development & economic growth of the country. GST has brought a significant change in the indirect tax structure. The Goods and Service Tax (GST) introduced with the aim to simplify the indirect taxes into a single tax. The Finance Ministry reported that the GST revenues for November 2021 were the second highest ever since the GST was implemented; this data shows the steady growth in the country’s indirect tax base. Several steps have been taken by the Government to improve the measures of implementation of GST and to address the challenges. In this write-up, we will discuss how to reply GST Summons.

What are Goods and Service Taxes (GST)?

In India, a comprehensive indirect tax known as the Goods & Services Tax (GST) is imposed on the supply of goods and services. This comprehensive tax includes all Value-Added Tax (VAT), Central State Tax (CST), Service Tax and Excise Duty. On July 1, 2017, the GST was introduced with the aim of streamlining the tax system and lessening the burden on both businesses and consumers. Businesses that sell goods for a turnover of more than Rs. Forty Lakhs must register for GST. It is Rs. Twenty Lakhs for all northern states (hilly states) for the sale of goods.

The goal of GST, a consumption-based tax, is to create a single, seamless market for goods and services in India. From the factory to the retail stage, the tax is imposed at each stage of the supply chain, and the tax paid on the inputs is applied to the tax due on the finished goods. This system of input tax credit ensures that only the value added at each stage of the supply chain is taxed.  

What is Summon?

A summons is a formal request or an order to appear in court or before a judicial or administrative body. It acts as notice to the person or entity being called upon to appear in a court case or to offer testimony or evidence in support of the case. Legal repercussions, such as s default judgment or contempt of court, may occur if a summons is not answered. A summons is a crucial component of the court system and a legally binding document. A summons is a legal written order to appear in court or to give information in support of a legal claim in simple terms.

What is Goods and Services Tax (GST) Summon? – Reply GST Summon

A GST Summon is a formal letter sent by the Goods and Services Tax (GST) authorities requesting that a person or company appear at a hearing to answer questions or clarify their GST compliance. The summon may be given for several reasons, such as Tax evasion, unpaid taxes, or inaccurate tax reporting. 

Avoid making frequent mistakes such as sending a response that needs to be more accurate, sending it after the due date, or not responding at all. To maintain compliance with GST standards and prevent any legal implications, responding to a GST summon demands a timely and competent response. In order to effectively prepare a response to a GST Summon, it is beneficial to seek the advice of professionals in GST compliance and taxation.

What are the Reasons for Goods and Services Tax (GST) Summon?

  • One of the most common reasons for receiving a GST Summon is a discrepancy in the GST returns filed. This can happen due to various reasons, such as an error in calculation, incorrect classifications or failure to report certain transactions. In such cases, the GST department may ask for clarification or additional information.
  • When Input Tax Credit (ITC) obtained is improperly used or claimed is another reason for GST summons. Wrong utilization of ITC occurred when the credit claimed exceeds the eligible amount. Wrong availing of ITC on the other hand, occurs when a business claims ITC without actually paying the tax on the inputs.
  • Another reason for receiving the GST summon is non-compliance with GST regulations. This could include failing to register for GST, failing to file GST return within the specified timeframe, or failing to maintain proper records.
  • A GST summon can be received if the tax is collected but has not been paid.
  • It is also possible to receive a GST summon for conducting business activities without a valid GST registration. Non-payment of GST with or without fraudulent intentions,
  • GST refunds are incorrectly issued, with or without fraudulent intentions.

Overview of Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act)

The GST officers have the authority to summon anyone to appear before them under section 70 of (the CGST Act). If such individuals are summoned they have to appear before the GST Authorities. It is important to remember that the summons and the information obtained afterwards represent the beginning of GST law proceedings. As s result it becomes imperative for the taxpayers to be knowledgeable about their rights and obligations as well as how to respond to the summons. Investigations are crucially impacted by these sections, and violations may lead to penalties and arrest measures. As a result, it is advised to comply with the summons procedure. It is our duty as honest citizens of our country to help the department in its inquiries and proceedings.

Who can summon you? – Reply to GST Summon

Circular No. 122/41/2019-GST, dated November 5, 2019, is given full consideration in the CBIC’s instructions regarding the issuance of summons. Superintendents are only permitted to issue summons after getting prior consent from the officer, with written permission. In this situation, an officer should not be of a lower rank than Deputy or Assistant Commissioner. 

The GST officer who issues the summons is required to keep a record of the recipient of the summons’s presence or absence thereof.

Who can appear before the Goods and Services Tax (GST) Authority?

The summoned person should be the only one who can appear before the Goods and Services Tax (GST) Authority. The person can consult and take advice from a GST consultant, Chartered Account or an Advocate. But they cannot be present at the appearance at the place of the recipient.

Process to Reply GST Summon

When summon is received by anyone in regard to GST, the first step is to consult a GST consultant. This GST consultant any is a Chartered Accountant, advocate or any person aware of this matter. The summon is a legal procedure, so it has to be followed without fail. It is mandatory to reply GST summon, and no one can escape it. The taxpayer should be available at the court whenever he is summoned till the grounds on which the summon was given are not clarified and solved. The taxpayer has to give all the necessary and correct information on anything which is asked of him. The taxpayer can also be required to produce some documents if asked by the authority. The taxpayer has to sign all the necessary documents only after reading them.

Penalty for Non-compliance of Reply GST Summon

The Section 122(3) (d) of the Central Goods and Services Act of 2017[1] (CGST Act) states that if any person fails to be present before the central authority when a summons is issued for their appearance or to produce evidence or documents, then that person shall be liable to a penalty which may extend to twenty-five thousand rupees.

The taxpayer –Rights and Duties:

  1. Right to remain silent
  2. Right to cross-examination
  3. Right to retraction
  4. Right to refer to books of account and other documents

Conclusion 

GST summon is an official notice from the government that requires the recipient to provide information and clarification regarding their GST compliance. Personal presence is required in a GST summon as it allows the GST office to question the individual or entity directly and verify the information provided. This helps in building trust between the GST department and the individual of the entity to ensure the authenticity of the information provided. It is important to prepare for a GST summon by gathering all necessary documents, understanding the nature of summon and seeking professional help. It is vital to reply GST summon promptly and professionally to maintain compliance with GST regulations and resolving any issues in a timely and effective manner. 

Read our Article:How Offences & Penalties Under GST Can Put In Trouble?

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