Handling litigation under the Goods and Services Tax (GST) involves a series of steps to ensure that you are following the proper procedures and mitigating any potential risks. Litigation under GST is one of the most talked about subjects lately due to the changing nature of GST laws and rules. The laws and regulations governing GST have undergone extensive change during the past five years, and they continue to develop on a daily basis. There has been a slow shift in the government’s focus away from GST compliance and now toward GST litigation.

The number of GST departmental audits has increased and so have the show cause notices. The government authorities have been on regulating the business laws strictly and are keeping a watch for tax fraud and mismatch cases etc. Well, the best practice to avoid GST litigation is following the rules but mishaps happen all the time. So, here, in this article, we will discuss, how to handle litigation under GST in five easy steps.

1. Familiarize yourself with GST laws and regulations

First and foremost, it is now crucial rather than an obligation for professionals handling the litigation to gain a keen understanding of how to interpret, comprehend, and absorb legal provisions. This always mandates you or the personnel handling the litigation for you to have a basic understanding of the law, which is essential when it comes to GST practice since if you don’t, you run the risk of getting your business into problems if a problem arises.

So it is important to be conversant with the GST laws and litigation under GST. For the same, it is significant to absorb the provisions of GST law and be updated with all the GST circulars, and notifications relevant to your case. Know your facts in-depth.

2. Examine the Notice or SCN

If your company receives a notice or show cause notice on the basis of a GST audit or for some other reason, it is advisable to go through the details of it first rather than taking hasty decisions. Check the validity of the SCN or Notice first, including whether the DIN is mentioned, and whether the notice has been updated on the GST portal, also check the authority’s authorization to issue the notice, and the circumstances and justifications surrounding its issuance. Then gather all of your information and facts about the problem raised there. There can be two situations:

– Legal ground is not needed: After you have separately recorded the factual and legal justifications, it is that you can resolve the case simply by providing factual information. When your case is solely fact-based and can be adequately explained using simple facts, it is pointless to engage in legal arguments.
– Legal ground is needed: If you feel that your situation requires a legal route then start making a list of potential legal defenses that could be used in your case. Use a reliable online or offline tax library, tax magazine, or significant case laws on the topic to your advantage. Talk to an expert in the subject matter and take help as much as possible.

3. Gather relevant documents and evidence, prepare your reply

In order to give an appropriate reply to the SCN, prepare the company brief and decide how to deal with the notice/appeal. Make a plan of action to ensure defending the company at all costs. In order to prove your company’s case, you will need a lot of pieces of evidence, documents, data, and related information that you need to collate and produce before the officials. After collecting the data, it is also necessary to verify and validate it so as to maintain accuracy. Once the information and documentation are in place, now you need to draft a suitable reply to the notice received based on factual information that you have collected.

4. Respond to the notice or file a reply

If you receive a notice related to GST litigation, you need to respond to it within the specified time frame. If necessary, you can file a reply to the notice, explaining your position and providing any supporting evidence.

5. Prepare to deal with authorities

Once the reply or your appeal is ready, you need to submit it to the department. The team handling the companies’ GST litigation may have to go through interrogations by the authorities. Sometimes, it will be evident that the authorities are ill-equipped to deal with some of the more complicated issues that their intelligence system generates and communicates to them via the government system. It is necessary to be patient and calm in such situations. Also, present all the documents and facts that the authorities demand timely.

The last part of the process is taking part in the case appearance before the Adjudicating Authority to defend your case. For the same, you need to have the case documents ready and of course, your lawyer will help you deal with the necessary next steps.

These steps will help you handle litigation under GST in an effective and efficient manner. It’s important to remember that each case is unique and may require a different approach, so it’s always a good idea to seek professional advice from a GST expert.

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If you want to simplify your GST litigation process, and assessments, and be better prepared for departmental audits, choose IRIS LMS today!

How can IRIS LMS help you?

IRIS LMS is a Litigation Management Solution (LMS) developed by IRIS in association with DAA Consulting, a specialized Indirect Tax Consulting Organization with in-depth experience in litigation, knowledge of the subject and an understanding of the practical difficulties faced by various industries.

IRIS-DAA have combined their individual strengths of Technology and Subject Matter Experiences & Expertise to develop a robust product anticipating the needs of the industry in light of the faceless assessments under GST which is in pipeline.

LMS is a cloud-based litigation management software with Artificial Intelligence, a proactive alert mechanism, extensive reporting and an analytics dashboard for enterprises.

LMS is here to assist you in facing GST departmental audits and efficiently manage GST litigation.

Further, Integration through API with GSTN Portal is under request with GSTN to enable better tracking.

What can you do with IRIS LMS?

1. Track: Status of Litigations on real-time basis at GSTIN Level
2. Store: Complete trail of Litigation from 1st Letter to Replies, Hearing Proceedings to Final Order
3. Retrieve: Data through friendly UI with custom categorizations
4. Archive: Gst Returns Data and Various Reconciliations to handle Departmental Audit in the future
5. Alerts: For various Due Dates for Pending Replies, Appeals, Personal Hearings, Written Submissions

IRIS is a listed reg-tech solution provider and an authorized GSP for the past 5 years. IRIS GST has helped businesses like L&T, Bajaj, Thermax and Forbes meet their GST compliance efficiently and effectively with no missed due dates and 100 % ITC claim.