Background of the Case

The petitioner challenged a GST assessment order issued in Form GST DRC-07 for FY 2022-23 along with consequential recovery proceedings initiated through Form GST DRC-16. The dispute primarily related to levy of GST at the rate of 18% on works contract services executed for a State Government department. However, the petitioner questioned the very validity of the assessment order on the ground that the DRC-07 order dated 25.07.2023 did not bear the signature of the Proper Officer. The Revenue contended that the order had already been served by uploading it on the GST portal and that the writ petition had been filed with considerable delay. The matter was therefore placed before the Andhra Pradesh High Court to determine whether an unsigned assessment order could survive in law and whether the delay in approaching the Court would disentitle the petitioner from relief.

Arguments by the Appellant (Taxpayer)

The petitioner contended that the impugned DRC-07 order was void and unenforceable as it lacked the signature of the Proper Officer. Reliance was placed on earlier decisions of the Andhra Pradesh High Court, including A.V. Bhanoji Row, SRK Enterprises and SRS Traders, wherein the Court had consistently held that an assessment order without a valid signature is legally defective and cannot be sustained. The petitioner further submitted that the assessment order had not been served through conventional means and was merely uploaded on the GST portal. It was argued that the petitioner became aware of the proceedings only subsequently and therefore the delay in approaching the Court ought not to defeat a challenge against an order suffering from a patent legal defect.

Respondent’s Response (Revenue Department)

The Revenue opposed the writ petition on the ground of delay and submitted that the petitioner had failed to explain the prolonged period between issuance of the assessment order and filing of the writ petition. The department further argued that Section 169(1)(d) of the CGST Act specifically recognizes uploading of notices and orders on the GST portal as a valid mode of service upon a registered person. Accordingly, the department contended that the petitioner could not avoid the consequences of the assessment merely by claiming lack of knowledge of the order. The Revenue therefore sought dismissal of the writ petition while defending the validity of the assessment proceedings.

Court Findings and Decision

The Andhra Pradesh High Court held that the issue was squarely covered by its earlier judgments which had categorically ruled that the absence of the Proper Officer’s signature renders an assessment order invalid and that such a defect cannot be cured under Sections 160 or 169 of the GST Act. While the Court acknowledged the department’s objection regarding delay and recognized that uploading of orders on the GST portal is generally treated as a valid mode of service, it also took note of the practical difficulties faced by taxpayers under the GST regime and the recurring disputes relating to access and awareness of portal-based communications. Balancing the interests of both parties, the Court set aside the unsigned DRC-07 assessment order and remanded the matter to the Proper Officer for fresh adjudication after providing an opportunity of hearing to the petitioner. However, the relief was made subject to the condition that the petitioner deposits 20% of the disputed tax within six weeks. The Court further directed that the period during which the writ petition remained pending shall be excluded for limitation purposes and left all issues open for reconsideration by the Proper Officer.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post Andhra Pradesh High Court Sets Aside Unsigned GST Assessment Order appeared first on Tax Unplug.

Court’s Key Observations

The Court clarified that Section 73(2) is intended to provide a meaningful opportunity of hearing to the taxpayer. The three-month period is necessary to enable filing of replies, conduct of personal hearings, grant of adjournments, and exercise of the option for voluntary payment under Section 73(5). Any reduction in this statutory time defeats the principles of natural justice.

The Court rejected the department’s argument that the three-month gap applies only when notices are issued close to the limitation period. It held that the requirement applies in all cases, regardless of when the SCN is issued.

Decision of the Court

Since the SCN was issued on 18 November 2024 and the final order was passed on 31 January 2025, the statutory three-month gap was not maintained. Accordingly, the SCN and the final order were quashed, and the matter was remanded for fresh adjudication in accordance with law.

Key Takeaway for Taxpayers

GST adjudication orders passed without observing the mandatory three-month gap under Section 73 are liable to be set aside, even if issued within the limitation period.

To download official order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post Bombay High Court Mandates 3-Months Gap Between SCN & Issuance of Order Under Section 73 of CGST Act appeared first on Tax Unplug.

In this article, we will explain in simple terms what happens if you don’t file GST return on time, the penalties you may face, and when to seek professional help from trusted experts like TaxUnplug.

Why Filing GST Returns on Time is Important

GST returns are the official records of your sales, purchases, and tax payments. Filing them on time ensures:

• Smooth input tax credit (ITC) claims
• Avoiding late fees and penalties
• Maintaining a good compliance rating
• No legal trouble or notices from GST authorities

What Happens If You Don’t File GST Return on Time

1. Late Fees

If you delay filing, you must pay a late fee of Rs. 50 per day (Rs. 25 each for CGST and SGST). If there is no tax liability, the late fee is Rs. 20 per day (Rs. 10 each for CGST and SGST).

2. Interest Charges

Along with late fees, you must also pay 18% annual interest on the outstanding tax amount, calculated from the due date till the payment date.

3. Blocked Input Tax Credit (ITC)

When you don’t file your return, your buyers may not be able to claim ITC. This can hurt your business relationships.

4. Restriction on Future Filings

GST returns are linked. If you don’t file the current return, you won’t be able to file the next one. This creates a chain of delays.

5. Notice from GST Department

The GST authorities may issue a notice for non-compliance. If ignored, it can lead to higher penalties and even cancellation of your GST registration.

6. Impact on Business Reputation

Frequent delays in GST filing can affect your compliance rating, making it harder to get loans, partnerships, or contracts.

When to Consider Professional Help

Managing GST can sometimes feel confusing, especially for small businesses and startups. You should consider expert help when:

• You have multiple invoices every month.
• You are not sure about ITC claims.
• You have already missed deadlines and need guidance.
• You receive a notice from GST authorities.
• You want stress-free and error-free filing.

This is where TaxUnplug can help. Their team of tax professionals makes GST filing easy, accurate, and hassle-free. With proper guidance, you can avoid penalties and focus on growing your business.

How TaxUnplug Can Help You

• Timely GST return filing and reminders
• Error-free calculations
• Expert handling of GST notices
• Assistance in claiming correct ITC
• Personalized tax support for your business

By choosing TaxUnplug, you can save money, time, and effort while staying compliant.

Conclusion

GST Return Late Filing

Filing your GST returns on time is not just about avoiding penalties—it’s about maintaining the financial health and credibility of your business. Delays can block your ITC, invite notices, and disrupt your operations.

With expert support from TaxUnplug, you can stay compliant, reduce stress, and focus on what truly matters — growing your business.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post What Happens If You Don’t File GST Return on Time? appeared first on Tax Unplug.

When it comes to managing taxes, many people turn to YouTube videos or free tutorials in search of quick solutions. While these platforms may offer basic knowledge, they often create confusion and risks. Taxes are complex, and one wrong step can cost you penalties, notices, or even legal troubles.

“This is where a qualified Tax Professional makes a difference. A qualified expert not only understands the rules but also ensures you stay compliant with the latest tax laws. In this article, we’ll explain why you should choose a tax professional over free online content and how they can help you avoid costly mistakes.

The Role of a Tax Professional

A Tax Professional is a qualified expert who understands tax laws, filing requirements, and financial regulations. Their job is to:

• Help you file taxes correctly.
• Minimize the risk of penalties.
• Optimize tax planning strategies for individuals and businesses.
• Stay updated with changing tax laws.

Unlike free online tutorials, tax professionals provide real-world solutions tailored to your situation.

Why Avoid YouTube & Other Mediums?

1. Outdated Information

Tax rules change frequently. Many YouTube videos are months or even years old, making their advice outdated. A Tax Professional stays updated with the latest regulations.

2. Generic Advice vs. Personal Solutions

YouTube creators provide general content. But your tax situation is unique. Only a Tax Professional can give personalized advice based on your income, business, and financial goals.

3. Risk of Misinterpretation

Even if the information is correct, interpreting tax laws is tricky. Misunderstanding a clause could lead to wrong filing or penalties.

4. No Accountability

If you follow a wrong YouTube tip, the creator won’t take responsibility. But a Tax Professional is accountable for their work and provides support if issues arise.

Benefits of Hiring a Tax Professional

1. Expertise & Knowledge

Tax professionals have the training and certification needed to handle complex tax matters.

2. Saves Time & Effort

Instead of spending hours searching on YouTube, you can focus on your work while a professional handles your taxes.

3. Compliance & Accuracy

They ensure error-free tax filing and 100% compliance with laws, reducing the risk of penalties.

4. Personalized Tax Planning

A tax professional helps with long-term tax planning, ensuring maximum savings while staying legal.

Common Mistakes People Make Without a Tax Professional

• Filing late or missing deadlines.
• Claiming ineligible deductions.
• Submitting incorrect documents.
• Ignoring tax notices.
• Misinterpreting tax laws.

These mistakes can result in penalties, audits, or even legal action.

Frequently Asked Questions (FAQ)

1. Why should I hire a tax professional?

A Tax Professional ensures your taxes are filed accurately, helps you avoid penalties, and provides personalized tax planning. Unlike free resources, they give solutions tailored to your financial situation.

2. Can YouTube help me with tax filing?

YouTube can provide basic knowledge, but it is risky for actual tax filing. Tax laws change frequently, and YouTube videos may be outdated, generic, or misinterpreted. A Tax Professional ensures compliance with the latest rules.

3. What are the risks of solving tax issues on my own?

The most common risks include filing errors, missing deductions, late submissions, and legal notices. These can cost you more than hiring a professional in the first place.

4. How does a tax professional save me money?

By identifying eligible deductions, planning long-term tax strategies, and ensuring correct filings, a tax professional helps you save money legally while avoiding fines.

5. Do small businesses need a tax professional?

Yes! Even small businesses face complex tax rules. A tax professional helps manage GST, TDS, income tax, and compliance, ensuring smooth operations.

Conclusion

Why Choose a Tax Professional for Your Tax Issues?

When it comes to taxes, relying on free online sources like YouTube may cost you more in the long run. A Tax Professional offers expert knowledge, saves you time, and ensures compliance with laws.

Protect your financial future. Consult a Tax Professional today with TaxUnplug and file your taxes with confidence.

The post Why You Should Hire a Tax Professional Instead of Relying on YouTube or Free Online Advice? appeared first on Tax Unplug.

Below is a detailed overview of the latest modifications introduced in the IMS, effective from the October 2025 tax period.

Pending Action for Specified Records

Taxpayers can now keep certain specified records in the pending category, but only for a limited period.

• For monthly filers, the pending status can be maintained for one month (one tax period).
• For quarterly filers, the pending status can be maintained for one quarter (one tax period).

The following types of records can be kept pending in the system:

• Credit Notes or upward amendments of Credit Notes
• Downward amendment of Credit Note where the original Credit Note was rejected
• Downward amendment of Invoice/Debit Note where the original Invoice was already accepted and GSTR-3B has been filed
• ECO-document downward amendment where the original document was accepted and GSTR-3B has been filed

This new control ensures that the pending option is used within a defined timeframe, encouraging timely reconciliation and reducing open items in the system.

Declaring ITC Reduction Amount

To bring more clarity on the reversal of Input Tax Credit (ITC), the GSTN has specified the following:

• If the recipient has not availed ITC on a particular invoice or document, no ITC reversal is required.
• If ITC has been availed only partially, the reversal obligation will be limited to the extent of ITC actually availed.

Accordingly, a new facility has been added in the IMS where taxpayers can declare the amount of ITC actually availed and, where applicable, enter the amount to be reversed.

This facility allows taxpayers to:

• Reverse ITC either in full or in part, by specifying the amount.
• Declare reversals that have already been made earlier or where ITC was never availed.

Such transparency helps prevent unnecessary reversals and ensures accurate ITC reporting in line with Section 16(4) of the CGST Act, 2017.

Option to Save Remarks

A new “Remarks” feature is being introduced in IMS, allowing taxpayers to add short notes or explanations while marking any record as rejected or pending.

• This feature is optional and will be rolled out shortly.
• The remarks entered will appear in the taxpayer’s GSTR-2B for future reference.
• The same will also be visible to suppliers in their Outward Supplies View Dashboard, helping them identify issues and make necessary corrections.
• This improvement enhances communication and transparency between suppliers and recipients.

Effective Date and Due Date

• The new functionalities related to keeping credit notes pending and declaring ITC amounts will be made effective from the October 2025 tax period.
• The due date for keeping records pending will be calculated based on the date or tax period in which such documents are communicated by the supplier.

Conclusion

GST Portal Update: New Changes in Invoice Management System (IMS)

The above-mentioned changes will apply only to records filed by suppliers after the rollout of these new features. Taxpayers are advised to carefully review the new provisions and utilize them while taking actions and filing returns for upcoming periods.

These updates in the IMS mark another progressive step towards a more transparent and efficient GST compliance system. By allowing partial ITC reversals, restricting the pending period, and introducing remarks for better communication, the GSTN aims to strengthen invoice-level accuracy and reduce disputes in ITC reconciliation. To read more about IMS Facility, click here to read our blog on “GST Portal new Facility “Invoice Management System (IMS)”

To download official advisory, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post GST Portal Update: New Changes in Invoice Management System (IMS) appeared first on Tax Unplug.

As the world becomes more interconnected, it’s increasingly common for Indian residents to have financial interests abroad—whether it’s a bank account in the UK, inherited property in Canada, or mutual fund investments in the US.

But with this global exposure comes a critical tax responsibility that’s often overlooked: reporting foreign assets in your Indian Income Tax Return (ITR).

Unfortunately, many Indian taxpayers—knowingly or unknowingly—make costly mistakes in this area. In this blog, we’ll unpack what foreign asset reporting entails, highlight the most common errors, and show you how to stay compliant (and penalty-free).

WHAT IS FOREIGN ASSET REPORTING IN INDIA?

Under the Income Tax Act, 1961, Indian residents are mandated to disclose all foreign assets and foreign income when filing their ITR—specifically under Schedule FA (Foreign Assets).

You must report:

• Foreign bank accounts (even if dormant)
• Shares and securities held overseas
• Foreign real estate
• Trusts or entities where you are a beneficiary
• Any other foreign financial interest

Important: Only Residents and Ordinarily Residents (ROR) are required to report foreign assets. Non-Resident Indians (NRIs) and Resident but Not Ordinarily Residents (RNORs) are typically exempt.

TOP 5 FOREIGN ASSET REPORTING MISTAKES INDIAN RESIDENTS MAKE

1. Ignoring Dormant or Low-Balance Accounts

Think your foreign bank account doesn’t need to be reported because it’s inactive or has just INR 50? Think again.

The law requires you to disclose all foreign accounts, regardless of the balance or activity status. Even if it’s a joint account with a relative or was used years ago, it must be declared.

2. Failing to Report Inherited Foreign Assets

A common myth:

“I inherited that house in Canada—I didn’t buy it, so I don’t needto report it.”
Wrong.

If the foreign asset is still in your name, it must be reported under Schedule FA—regardless of how you acquired it.

3. Thinking Only Foreign Income Needs Disclosure

Many Indian taxpayers mistakenly believe they only need to report foreign income, not the assets themselves. This is a costly misunderstanding.

Asset disclosure and income reporting are two separate obligations. Even if you’ve paid taxes abroad, the asset itself still needs to be disclosed in India.

4. Relying on Inexperienced Tax Preparers

Foreign asset reporting is complex. Unfortunately, many local CAs or tax preparers lack experience with international tax laws.

If your advisor tells you, “You don’t need to disclose unless you’re earning big money abroad,” it’s a red flag. Always consult a specialist with international tax expertise.

5. Skipping Schedule FA Altogether

This one’s more common than you’d think. Even diligent taxpayers sometimes file their ITR but miss out Schedule FA entirely.

This is a serious compliance failure. The Income Tax Department may treat it as non-filing or misreporting, which can lead to

• Penalties of ₹10 lakh or more
• Prosecution in extreme cases

The Black Money Act: Why This Isn’t Just a Small Mistake

In 2015, the Indian government introduced the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act—commonly called the Black Money Act.

Key highlights:

• A flat 30% tax on undisclosed foreign income/assets
• No deductions or set-offs allowed
• Penalties and prosecution (up to 10 years) for willful default
• Authorities can reopen past assessments

This law is a serious attempt to clamp down on undisclosed foreign wealth—and it’s working.

How to Get Compliant (Before It’s Too Late)

If you’ve missed disclosures in the past, don’t panic—but do act now:

1. Collect all documents related to foreign assets, even dormant ones
2. Consult a qualified CA or tax advisor who understands foreign asset reporting
3. File a revised return or use the Updated Return (u/s 139(8A)) provision if applicable
4. Consider voluntary disclosure options (if available)

Delaying further can expose you to severe penalties and legal action.

Final Thoughts: Don’t Let Silence Cost You

Holding foreign assets isn’t the problem—not reporting them is.

With global data-sharing agreements like FATCA (with the US) and CRS (Common Reporting Standard), Indian tax authorities are getting automatic updates on your foreign holdings. Sooner or later, undeclared assets will come to light.

Whether it’s an old account, a small investment, or inherited property—disclose it.
Stay compliant. Stay stress-free.

Need Help?

FOREIGN ASSET REPORTING

If you’re unsure about your foreign asset obligations, don’t rely on guesswork. Speak to a tax advisor with cross-border experience and ensure you’re fully protected.

Because when it comes to foreign assets, silence is not golden—it’s expensive.

The post FOREIGN ASSET REPORTING: THE COSTLY MISTAKES MANY INDIAN RESIDENTS MAKE appeared first on Tax Unplug.

Tvl.Glo Shipping Logistics Pvt. Ltd vs. Revenue [W.A. No.302 of 2025]

Background of the Case

The Appellant has received a show cause notice for the financial year 2019-20 proposing a demand of Rs. 21,77,261/- under Section 73 of the GST Act. However, after considering the appellant’s reply, the assessing authority passed an order dated 31.08.2024 demanding Rs. 98,83,029/- – nearly five times the amount mentioned in the initial notice. The appellant challenged this order before the Madras High Court contending that the final demand exceeded the amount specified in the show cause notice, violating Section 75(7) of the GST Act

Arguments by the Appellant

The appellant argued that the impugned order suffered from jurisdictional error as it introduced completely new grounds not part of the original show cause notice. The appellant emphasized that Section 75(7) expressly prohibits tax authorities from making demands beyond the grounds specified in the notice. Regarding the Single Judge’s remand order, the appellant contended that the condition restoring the original demand if reply wasn’t filed within three weeks was unduly harsh and deprived them of a meaningful opportunity to contest.

Respondent’s Response

The respondent, Revenue contended that the appellant’s own business records and submissions during the assessment proceedings had revealed crucial information about their operational model. These disclosures, according to the respondent, clearly established that the appellant was functioning as an “Intermediary”. Further the respondent argued that the provision of section 75(7) only prohibits demands on entirely new grounds not contemplated in the notice. The respondent highlighted that the Single Judge’s remand order itself served as an adequate safeguard. They stressed that the three-week response window was standard procedure in GST matters and couldn’t be considered unreasonably short,

Court Findings and Decision

The Madras High Court, held that statutory mandate of Section 75(7) of the GST Act, which expressly prohibits revenue authorities from making demands on grounds not specified in the original show cause notice. The Bench observed that the department’s attempt to classify the appellant as an “Intermediary” constituted a completely new cause of action rather than a mere expansion of the original allegations. The Court expressed grave concerns about the automatic restoration clause, noting that such provisions create an unfair “Sword of Damocles” situation for appellant.

Court extended the response period from three to four weeks, providing more reasonable compliance time and expressly permitted the appellant to raise all substantive defenses including limitation and jurisdictional challenges. The Court directed the assessing officer to consider the reply afresh without being influenced by earlier proceedings

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post Madras High Court Quashes GST Demand Order for Deviating from Show Cause Notice Grounds: Reaffirms Importance of Procedural Fairness in Tax Compliance appeared first on Tax Unplug.

Getting your GST registration cancelled can be a nightmare for any business. Without a valid GST registration, you cannot legally conduct taxable sales, claim input tax credit, or file GST returns. If your GST registration got cancelled, you must know why it happened and how to fix it.

In this article, we’ll discuss the reasons for GST cancellation, its consequences, and the steps to restore it. Let’s dive in!

Common Reasons Why GST Registration Gets Cancelled

Your GST registration may be cancelled due to various reasons. Here are the most common ones:

1. Non-Filing of GST Returns

If you fail to file GST returns for six consecutive months (for normal taxpayers) or two consecutive quarters (for composition taxpayers), your GST registration is automatically cancelled.

Solution: Regularly file your GST returns to avoid cancellation.

2. Providing Incorrect Information

If you submitted incorrect details like a fake address, PAN, or business documents while registering, your GST registration can be cancelled by the authorities.

Solution: Ensure all details provided during GST registration are accurate and verifiable.

3. Business Discontinuation or Closure

If your business shuts down permanently or merges with another entity, you must cancel your GST registration voluntarily. If you don’t, the GST department may do it for you.

Solution: If you close your business, apply for voluntary cancellation to avoid penalties.

4. Violating GST Laws

If you violate GST laws such as issuing fake invoices, claiming wrongful input tax credit, or not maintaining proper records, your GST registration may be cancelled.

Solution: Always comply with GST laws and maintain accurate records.

5. Non-Compliance with E-Way Bill Rules

If you are involved in fraudulent e-way bill transactions, the GST department can cancel your registration.

Solution: Follow e-way bill rules properly and avoid fake transactions.

6. Not Conducting Business Activities

If your business is inactive for an extended period, the GST department may cancel your registration due to non-operation.

Solution: Regularly update your business activities and inform the GST department.

 What Happens After GST Registration is Cancelled?

• You cannot collect GST from customers.
• You lose the ability to claim input tax credit (ITC).
• Your business becomes non-compliant, which may lead to legal action.
• You may have to pay penalties and dues before applying for re-registration.

How to Restore Your Cancelled GST Registration?

If your GST registration is cancelled, you can apply for revocation within 30 days of cancellation. Here’s how:

Steps to Apply for GST Revocation:

1. Log in to the GST portal (www.gst.gov.in).
2. Go to ‘Services’ > ‘Registration’ > ‘Application for Revocation of Cancelled Registration’.
3. Fill in the required details and provide a valid reason for revocation.
4. Upload necessary documents like compliance records and explanation letters.
5. Submit the application and wait for approval.

Once your request is approved, your GST registration will be restored.

How to Avoid GST Registration Cancellation?

• File GST returns on time.
• Keep all business details updated.
• Follow GST compliance rules.
• Avoid fake invoicing and fraud.
• Ensure proper e-way bill transactions.

FAQs on GST Registration Cancellation

Q. Can I apply for a new GST registration after cancellation?

Yes, but you must clear all pending liabilities and meet compliance requirements.

Q. What is the penalty for a cancelled GST registration?

A penalty of ₹10,000 or 10% of the tax due (whichever is higher) may be imposed.

Q. How long does it take to restore a cancelled GST registration?

It usually takes 7-15 working days after applying for revocation.

Q. Can I voluntarily cancel my GST registration?

Yes, if your business is shutting down or you are no longer liable for GST.

Q. What happens if I continue business without GST registration?

You may face heavy penalties and legal action from the GST authorities.

Conclusion

If your GST registration got cancelled, it’s essential to understand why and take immediate action. Follow GST compliance rules, file returns on time, and maintain accurate business records to prevent cancellation in the future.

For further assistance, you may contact Taxunplug  by dropping your Name, Mobile and Email. Our team of experts will take care of all the sticky things and helps to take timely action, and ensure compliance to avoid legal complications.

The information provided in above blog is for general informational only and should not be considered as legal or tax advice. Request you to please follow latest updated in reference to above details. We advise to consult with a qualified tax professional such as “Taxunplug” for all your tax needs.

The post Why Your GST Registration Got Cancelled by Department? appeared first on Tax Unplug.

Background: Search & Requisition Assessments Resurrected

In a significant legislative move, the Finance (No. 2) Act, 2024 reintroduced the block assessment mechanism for income tax searches and requisitions. This mechanism, governed by Chapter XIV-B of the Income Tax Act, 1961, had been dormant since 2003. The rationale behind its comeback is to provide a distinct and focused tax computation regime for undisclosed income unearthed during search operations.

To implement this system, a dedicated return form ITR-B was promised. After months of anticipation, CBDT has now notified ITR-B via gazette Notification No. 30/2025, dated 07^th April 2025.

Concept of ITR-B

ITR-B is a specialized income tax return form meant exclusively for cases covered under Section 158BC, which deals with search or requisition assessments conducted under:

• Section 132 (Search & Seizure), or
• Section 132A (Requisition of Books or Assets) on or after 01^st September, 2024.

This form is not for regular income but rather to report “undisclosed income” for block period of last six years preceding the year in which a search was initiated or a requisition was made and an additional period starting from April 1st of the previous year in which the search was initiated or requisition made up to the date of execution of the last authorization or requisition.

When to Use ITR-B?

The taxpayer (or legal representative) must file ITR-B when a search or requisition has taken place. If the return of income required to be furnished by any person under clause (a) of sub-section (1) of section 158BC, relating to any search initiated under section 132 or requisition made under section 132A on or after the 01^st September 2024. 

It should be noted that only income discovered during search or requisition proceedings is to be reported here. There is no need to report the income from regular business, salary, or capital gains income, if already disclosed in earlier ITRs.

What Does ITR-B Contain?

The ITR-B form contain following parts:

The form also includes verification statements and space to report pending appeals or legal proceedings, if any.

Taxation of Undisclosed Income: Section 113 in Focus

All income reported in ITR-B is taxed at a flat rate of 60% under Section 113 (plus applicable surcharge and cess). Deductions under Chapter VI-A or set-off of losses are not allowed. This ensures that all hidden or unreported income faces heavy taxation, reflecting the intent to penalize concealment.

Legal Implications & Strategic Filing

The filing of ITR-B is a compliance opportunity and can help taxpayers reduce litigation risks if done truthfully and timely. However, misreporting or underreporting can attract further penalties, reopening of other assessments, or prosecution under Sections 277 & 278.

Hence, professional assistance is highly recommended in preparing and filing ITR-B.

To Download Official Notification, Click Here

ITR-B for Block Assessments

Need Help with ITR-B Filing?

At Taxunplug, we specialize in representation and compliance for search and seizure cases. From understanding your block period to accurately disclosing income and ensuring proper legal strategy, our expert team is here to support you.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

The post ITR-B for Block Assessments: A Long-Awaited Clarity for Search Cases appeared first on Tax Unplug.

Introduction

Receiving a GST notice can be stressful for any taxpayer. The Indian tax authorities issue these notices for various reasons, such as discrepancies in filings, non-compliance, or suspicious transactions. Understanding why taxpayers get GST notices can help businesses and individuals stay compliant and avoid penalties.

Most common reasons why taxpayers receive GST notices and how you can prevent them.

1. Mismatch in GST Returns

A significant reason for receiving a GST notice is mismatched data between different GST returns. Authorities’ cross-check details from GSTR-1 and GSTR-3B. If there are discrepancies, you may receive a notice for clarification or rectification.

How to Avoid It?

• Regularly reconcile your GST returns before filing.
• Verify sales and purchase details with suppliers.
• Use automated accounting software to reduce manual errors.

2. Discrepancies in annual return and reconciliation statement

Businesses require to file annual returns (GSTR-9) and reconciliation statements (GSTR-9C), wherever applicable, to summarize their financial activities for the year. However, discrepancies may arise between these and the periodic returns (GSTR-1 and GSTR-3B) filed throughout the year, potentially leading to notice.

How to Avoid It?

• Reconcile your monthly return with annual return
• Amend and correct the mismatch data in appropriate time.
• Opt for the GST compliance services from professionals like “Taxunplug” if required.

3. Late Filing or Non-Filing of Returns

GST returns must be filed on time as per the due dates. If you fail to file or delay your returns, the tax department may issue a notice, and you might have to pay penalties or interest.

How to Avoid It?

• Set reminders for GST return deadlines.
• Opt for the GST compliance services from professionals, like “Taxunplug” if required.

4. Excess Input Tax Credit (ITC) Claims

Claiming excessive ITC or claiming ITC without proper invoices can trigger GST notices. Tax authorities scrutinize ITC claims to prevent tax evasion. Section 16(2) of CGST Act, 2017 defines following pre-conditions for availing ITC:

• You are in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed.
• You received the goods or services or
• subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply and
• He has furnished the return u/s 39 of CGST Act
• Payments to supplier (other than RCM ) will be made within 180 days from the date of issue of invoice, if failed, amount equal to ITC claim with interest will be added back to his outward tax liability.

How to Avoid It?

• Claim ITC only for eligible purchases.
• Validate all pre-conditions, which help in future compliances.
• Maintain valid tax invoices and records for ITC claims.

5. Turnover not matching with Income Tax Return

If your turnover shows a difference between the turnover reported in GST return and Turnover reported in Income tax return, authorities may send a GST notice for further investigation to identify any unreported income or sales.

How to Avoid It?

• Maintain proper sales records and justify any significant variations.
• Submit proper documentation if questioned by the tax department.

6. TDS/TCS Return discrepancies

TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) under GST are crucial mechanisms to track and regulate tax compliance on specific transactions. Businesses liable to deduct or collect tax must file periodic TDS/TCS returns accurately. Any mismatch between the reported figures and actual transactions or failure to file returns can trigger GST notices.

How to Avoid It?

• Accurate Deduction & Collection.
• Reconciliation of Transactions.
• Timely Filing of Returns

7. E-Way Bill and Supply Mismatch

For inter-state transactions, E-Way bills are mandatory. If the details in E-Way bills don’t match the GST returns, it can lead to scrutiny and a GST notice.

How to Avoid It?

• Generate E-Way bills for all applicable transactions.
• Ensure the information in GST returns and E-Way bills is consistent.

8. Non-Compliance with GST Notices

If a taxpayer receives a GST notice and fails to respond within the given timeline, it can result in further legal actions, penalties, or even cancellation of GST registration.

How to Avoid It?

• Always check GST notifications and emails regularly.
• Respond to GST notices within the prescribed time frame.

9. Fake Invoicing and Tax Evasion

Issuing fake invoices or engaging in tax evasion is a serious offense. If tax authorities suspect fraudulent activities, they can issue a notice or initiate legal action.

How to Avoid It?

• Avoid engaging in fake invoicing practices.
• Ensure all transactions are genuine and backed by proper documentation.

10. Non-Reversal of ITC on Ineligible Transactions

If a taxpayer does not reverse the ITC for ineligible transactions, such as personal expenses or blocked credits, the tax department may issue a notice.

How to Avoid It?

• Identify and reverse ineligible ITC on time.
• Keep track of expenses and their eligibility under GST rules.

What to Do If You Receive a GST Notice?

If you receive a GST notice:

1. Read the notice carefully – Understand the reason and the required action.
2. Gather relevant documents – Collect invoices, returns, and other supporting records.
3. Respond on time – Submit your response before the deadline.
4. Seek professional help – Consult a tax expert like “Taxunplug” if needed.

List of notices which can be issued under GST

Following table highlight GST Notices as issued under the GST laws:

How do I check if I have received a GST Notice

To check the notices issued by the Goods and Services Tax authorities, you need to follow the steps mentioned below:

1. Go to the official GST portal and Login in your account
2. You will be directed to the dashboard
3. Click on the “User Services” under “services” tab from the left sided menu

• Select the section “View notices and orders” or “View Additional Notices/Orders”

• A list of all notices and orders issued to you will appear. You can click on any notice to view its details.

Frequently Asked Questions (Common Reasons Why Taxpayers Get GST Notices)

Q1: What happens if I ignore a GST notice? Ignoring a GST notice can result in penalties, fines, or even cancellation of GST registration. It is best to respond promptly.

Q2: How do I check if I have received a GST notice? You can check your GST notices in the GST portal under the ‘Notices and Orders’ section or through email alerts from the tax department.

Q3: Can I get a GST notice even if I filed my returns on time? Yes, notices can be issued for mismatches, incorrect ITC claims, or any discrepancies in your filings.

Q4: How much time do I have to respond to a GST notice? The response time varies depending on the type of notice. Usually, the deadline is mentioned in the notice itself.

Q5: Can I challenge a GST notice? Yes, if you believe the notice is incorrect, you can challenge it by filing a reply with supporting documents.

Conclusion

Understanding the Common Reasons Why Taxpayers Get GST Notices can help businesses and individuals avoid unnecessary penalties. Regular compliance, accurate return filing, and prompt responses to notices are essential to staying safe from GST-related legal issues.

Common Reasons Why Taxpayers Get GST Notices

Facing an GST Notice? Connect with us by dropping your Name, Mobile and Email at Taxunplug. We will take care of all the sticky things and helps to take timely action, and ensure compliance to avoid legal complications.

The information provided in this blog is for general informational purposes only and should not be considered legal or tax advice. Please stay updated with the latest regulations related to the above details. We recommend consulting a qualified tax professional, such as Taxunplug, for expert assistance with all your tax matters.

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