GST Audit penalties
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Various options to reduce GST Audit penalties

GST fines are confusing. They must go online

When everyone wants to follow the best of the internal processes for their businesses, there might raise a lot of inadvertence in the information and the data that are provided in the data records where some might creep in due to some problems,

those problems will be revealed to the business persons and it will be displayed in the reconciliation statements, such as the business owners and the taxpayers would receive it.

For instance, a receipt that is recorded as 10,000 have been mistakenly recorded instead of the 100,000 in the records of the accounts may not come to the respected authorities’ notice until the issue is tracked back to the memo of the sale.

There is a difficulty in the identification of the correct particulars that is enhanced further when the business takes place at numerous locations but the accounting books are maintained at one location that has been centralized, or when there are a lot of memos of sales,

For example, if there are a hundred memos of sales, it is highly impossible to make any difference and it is going to need a lot of effort to make the validation and the verification of the each and every memo that has been made.

For these problems, one of the best routes to be followed to overcome all these cases is, following the case once the amount of shortfall is regulated by officers of the tax and it will be promptly paid in the office in a due of thirty days, where there will be no penalty be imposed to the payee.

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This is one of the fastest and the easiest ways to get rid of the issues and it helps the entrepreneurs to be in the safe zone from all the chaos and other risks that arise as a legal problem for the business.

The only amount that is surplus and may be required by the government to pay the money along with the interest on the money that is being paid in the shortfall that is regulated as a maximum of 18 percent.

However, this does not help the entrepreneurs in the long run, if the payment is made beyond the period that is mentioned in the norms, then a notice will be served to the respective person and the amount of the tax money that needs to be paid need to be paid along with the interest and the penalty that will be equivalent around ten per cent of the tax amount or a ten thousand Indian rupees, in this whichever will be higher during that time needs to be paid.

Where the incorrect particulars were furnished without any fraud, or any willful misstatement or suppression of facts to evade tax

This is the situation where it is a requirement to know about how to register your business properly and to get a legal aid where it may be a consequence of the following one,

  1. Where the tax is not paid,
  2. Where the paid is lesser than the required,
  3. Wrong availing of input tax credit,
  4. Where the credit is used by a fraud,

With willful misstatement and suppression of facts, which is suggested by the various facts or any other information for a taxable person, who is required to declare the return, statement or any report which is furnished under this act, or there can be failure to furnish the information where asked for, by the proper officer.

The following things can be used as a guide to show the notice which is received from the tax department by demanding the following explanation.

On basis of your statement about the tax or the tax which is ascertained by an officer, and prior to the service of notice such as any fraud, you should pay the amount of tax in addition with the interests that are under section 50 and a maximum of 18% with an equivalent penalty of 15%. It is a must thing to inform the officer in writing of payments, after that no notice will be serviced for any tax payable.

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Another alternative is that after the period, in which the notice is served for six months, paying the total tax which is mentioned in the notice with additional payable interest under section 50 and equivalent penalty of 25%. By finishing all proceedings in the above said notice should be concluded.

After a representation is made, the tax officer should assess whether the amount paid is adequate or not and may drop the proceedings.

The tax officer has whole rights and power to deliver an order up to five years from the date of filing return.

Thus, if you have not exhausted the alternatives, an equivalent penalty of 50% of tax along with interest within 30 days of communication of order will turn out into a payable one.

Provision to appeal

You have also options to go to the Appellate authority within 3 months from the date of communication of the order.

They can make a change in the tax amount determined by an officer and also the interest amount and penalty can also be modified.

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