GST notice for non-filing of GST return

Filing of GST returns is a major process in GST compliance, GST return is required to be filed by all the registered dealers within the due dates applicable to them.

GST periodical return is the primary source of information that the GST department depends on, for enforcing compliance by the taxpayers, the registered dealers pay the tax, fees, and penalty on a self-assessment basis.

Therefore, an assessment of the dealer tax liability is necessary to ensure the correct amount payable to the department is paid.

If GST returns are not filed, tax payable cannot be ascertained correctly, therefore the GST department sends notice in FORM-3A if GST returns are not filed within the due date.

GSTR-3A notice will be sent to all other registered taxpayers who have not filed their periodical GST return, once GSTR-3A notice is issued the dealer should file the GST monthly return within 15 days from the date of the notice.

Best Judgement assessment U/s 62

Best judgment is the process by which the department will ascertain or determine the tax and other amounts payable by the dealer for the period based on the data available to him or the data gathered by him from other sources.

Conditions for issuing the order U/s 62

• Showcase notice is not required to be issued before passing an order under section 62 determining tax and other amounts payable.
• Periodical returns such as monthly returns – GSTR-3B, GSTR-1, and GST annual return is not filed by the dealer
• Notice U/s.46 in FORM GSTR-3A is issued; the dealer failed to file the said return within 15 days.

How is the tax and other amount in the notice is calculated

Input tax credit statements GSTR-2A and GSTR-2B, GSTR-1, and E-way bill are the primary sources the officer depends on, to issue notice U/s.62 for best judgment. The information received from the third party is also considered, for example, the turnover data from the income tax return, reporting of information about the dealer by the third party, and information received during the scrutiny of other dealers.

The information so received will be processed by the proper officer as per the standard operation procedures for the issue of notice U/s 62.

How do we respond and deal with the Section 62 order?

Once the order under section 62 is issued relevant provisions regarding the time limit for passing the order, and the time limit for responding to the notice everything should be dealt with appropriately.

The time limit for passing order U/s 62

The order U/s.62 should be passed within 5 years from the due for filing the annual return for the financial year. The due date for filing annual returns for the financial year is December of the next financial year.

For the financial year 2023-2024, the due date for filing annual returns is 31st December 2024, so the order should be passed within 5 years from 31st December 2024 which is 31st of December 2029.

Best judgment order can be passed only for the period in which the GST registration stands valid, best judgment assessment notice cannot be issued for the period after the GST registration is canceled.

The time limit for responding to the order U/s 62

If the order U/s.62 is passed, and the valid return is filed within 60 days from the service of the assessment order, then the best judgment assessment stands withdrawn, how the interest and penalty is payable even though the orders stand withdrawn?

Return in response to the order U/s.62 can be filed with a further extension of 60 days by paying the additional penalty of Rs.100 per day, if a valid return is filed within an extended period of 60 days then the order stands withdrawn and the penalty and interest shall be payable.

What is the solution if the return is not filed within is extended time allowed?

Where the valid return is not filed in response to the best judgment order within the first 60 days or the further extended period of 60 days, then the only solution available is to file an appeal against the order.

Before filing the appeal the valid return for the period for which the order is issued is required to be filed, the appeal field should be filed with payment of the prescribed percentage of tax.

Even though an appeal can be filed the best remedy is to file a valid return before the time allowed. We consider dragging the best judgment assessment up to the stage of appeal to be a completely bad choice, a simple solution of filing a valid return within the time limit is a wise solution.