Namaskar

Have you heard of the My Way or the Highway approach?

My Way or the Highway is a famous idiom which simply means that “Either listen to me or else get ready to face the consequences”.

In the context of GST, it means you have to agree to the demands put in by the authority, if you disagree with their instruction, you have to take the Highway out of the town. Thereby leaving you with no choice but to agree to the demands.

This is similar to the attitude and proceedings of many GST officials which we have witnessed in the case of our customers.

The recent case of our Customer

We got to experience this first hand while we were dealing with the case of a customer.

In this particular case, the GST department issued a notice to the Business stating that one of their bills from FY 2017-18 was bogus and they must reverse the input credit that they had availed.

The vendor who had issued that particular bill was nowhere to be found and the Department cancelled his GST registration. Although, before the cancellation, the vendor had paid the due amount in GSTR 3B, which completed the transaction to the Govt.

The businessman immediately reached the officer and explained that the bill and the transaction were real. Bill is not bogus but the vendor is not available. The Officer stated that since the vendor is nowhere to be found, it does not make any sense whether it is bogus or non-existent.

The businessman further explained the scenario that -

• The vendor was registered in GST initially.
• The transaction took place through bank transfer, so the vendor had also completed the banking KYC process.
• The goods which he had bought from the vendor, he has also sold the same and also produced the relevant transportation document of the movement.
• He has also paid GST on it and has also booked in the P&L A/c for Income Tax purpose.

The businessman explained all these points but could not satisfy the officer who was adamant on processing his initial order. He said the same thing every time he would disagree, and whenever someone gets trapped, everyone makes similar arguments. The businessman was further notified that on non-payment of the dues as per the order, the officer could attach the Bank account of the Business and even block the credit ledger.

This leaves the businessman with no choice but to pay even when he has committed no mistake and transaction is genuine.

The businessman was facing a lot of mental pressure and finally decided to pay the amount UNDER PROTEST as per the notice thinking of the incident as a bad dream.

We share actual stories with you to enlighten you about issues that are happening and how you can protect yourself from getting into a similar situation.

Now, we'll discuss the steps you can take to make sure you don't face a similar issue and how to handle such a situation?

How to handle such situations?

According to our experience after handling hundreds of such cases, this is what we believe you should do -

• The first thing should always be to consult a GST consultant who can guide you about the situation. He/she will also tell you about the solutions in the pretext of Risk Involved. Besides that, he will also guide you in communicating officially with the Department. Please remember, now Officers also know GST and also have access to technology. Furthermore,  will Manage Approach does not work.
• Make sure to always be polite with the Officer in such cases. One small mistake in communicating can result in a significant financial loss for you.
• Make sure that every communication you have with the Department is formal and in writing. Verbal communications will have no ground and can cause issues in the future.
• The timeline given by the officer/notice should be respected in all cases. You cannot miss the deadline, and it should always be your priority for your Business. Asked for extension in exceptional situations. 

How to avoid such situations from happening?

The biggest tool in preventing the issue of bogus bills from any of your vendors is having e-KYC enabled for your Business. In addition to that, your ITC Reconciliation and Vendor ReturnTrack Status Process should be automated with software like the one given by GST DOST.

Constant reconciliation and monitoring are imperative at preventing these issues, and technology can help you achieve that.

Make sure that you are aware of all such steps in your Business. You should also be aware of the red flags and act on them immediately to avoid GST issues.

If you have any question/query about GST, feel free to reach GST DOST who will help you solve the issue and give you solutions that will make sure that you never have to face any problem/issue related to GST!

E: support@gstdost.com

T: 90 8888 3000

Thanks & Regards

Team GST DOST