GST notices from different states make life difficult for many companies

Companies are struggling to deal with increasing GST notices from different state departments as taxation is a centralised function in most companies and they, especially in services companies, find it difficult to segregate businesses per state.

The number of such notices from states, seeking documents and representations as part of tax scrutiny, has increased significantly since the conclusion of GST compensations for states in July 2022.

The number of GST notices from different state departments has increased significantly since the conclusion of GST compensations for states in July 2022.

This is because the states are now responsible for collecting their own GST revenue, and they are conducting more audits to ensure that companies are complying with the law.

The increase in GST notices has been particularly challenging for companies that centralize their accounting functions. These companies often find it difficult to segregate their business activities by state, which is required for GST compliance.

The GST authorities have provided some guidance on how companies can comply with the law, but there are still some challenges that need to be addressed.