Deadline For Adjudication May Be Behind Flurry Of GST Notices, Experts Say

A deadline on adjudication could be among the reasons that have prompted GST authorities to issue the series of GST notices in the recent past, according to legal experts.

Demands citing an alleged tax shortfall, extending from the gaming industry to the insurance and auto sectors, have been issued by GST authorities up to Sept. 30, 2023.

According to an ET report, many other smaller taxpayers have also received tax demand notices for FY18 for several reasons, including mismatches in GST output and liability, input tax credit, ineligible tax credit claims, and reversal of credit in the case of exempt supplies.

One of the reasons for the timing of the notices is the stay on the Karnataka High Court decision in the Gameskraft case, as the Supreme Court will now hear on the matter, Abhishek Rastogi, dounder of Rastogi Chambers, told BQ Prime.

On technical grounds, Rastogi said, a lot of these notices may become time-barred after the extended period of limitation (for cases pertaining to 2017–18) where mala fide intent will have to be proved.

Some of the companies facing these tax notices have also indicated in their exchange notifications that they will proceed through legal channels--most recently with Dream 11 filing a writ at the Bombay High Court.

From Oct. 1 onwards, a 28% GST levy will come into effect on the full face value of deposits made at the entry point for online gaming, horse racing, and casinos, as per the 51st GST Council.

The All India Gaming Federation has submitted a representation to the government to defer this implementation date. It remains to be seen how effectively this would be carried out, as many states have yet to pass the required legislation.

L Badri Narayanan of Lakshmikumaran and Sridharan Attorneys told BQ Prime that for the period 2017–18, the latest date of adjudication for disputes can take place by the end of this year in December. The cases would have a huge impact on the industry and, in many cases, severely impact cash-flow positions, he said.

Watch the full conversation here: