The Directorate General of GST Intelligence has issued over 20,000 notices nationwide for a variety of issues, including alleged tax shortfalls, input tax credit (ITC) reversals, and legal interpretation disputes. These notices, primarily for the assessment years 2017-18 to 2021-22, amount to over Rs 80,000 crore in tax demands. The notices were required to be issued at least six months before the end of the five-year period, with most for AY 2017-18 time-barred by August 5. Final orders are expected by February 2025.
Section 74 of the Central GST Act allows authorities to recover underpaid or unpaid taxes, or refunds made in error, for reasons such as fraud or willful misstatement. Notices were served due to discrepancies between GST returns and annual financial statements. A wide range of sectors, including foreign airlines, shipping companies, insurance firms, and online gaming companies, have been affected.
In response, the Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines to ensure uniformity in GST notices and audits. These guidelines aim to create a predictable business environment, reduce inconsistencies, and minimize litigation.
Additionally, a special drive has been undertaken to combat fraudulent ITC claims, with around 1.2 trillion tax evasion cases detected and 59,000 entities identified for verification.
Meanwhile, the income tax department processed nearly 40 million income tax returns (ITRs) for AY 2024-25 within 15 days, with over 72.8 million ITRs filed by July 31, 2024. The Central Board of Direct Taxes (CBDT) has also set a six-month deadline to review the Income Tax Act of 1961, aiming to reduce litigation and provide tax certainty for taxpayers.
