You are currently viewing GST LITIGATION



Last Updated on July 18, 2023 by Kanakkupillai

GST litigation

GST litigation refers to legal disputes that arise to resolve problems and issues related to Goods and Services Tax (GST), including compliance and interpretation. This article will explore some common issues that often lead to GST litigation.

Transitional Credit:

One of the challenges taxpayers face is transitioning from the previous indirect tax system to GST. Calculating transitional credit requires caution, as errors or miscalculations can result in GST litigation.

Input Tax Liability:

GST allows taxpayers to claim credit for the input tax liability against their output tax liability. However, conflicts arise when classifying certain goods and services that are eligible for availing Input Tax Credit (ITC). Taxpayers may resort to litigation if they are not eligible to claim ITC benefits for the goods and services they have provided.

Refund Claims:

In certain cases, taxpayers may be eligible for a refund of the excess tax amount they have paid. However, if tax authorities do not approve the refund claim, it can lead to GST litigation.

Non-Payment or Short Payment of Output Tax Liability:

GST authorities emphasize the collection of GST from businesses for the goods and services they produce. If taxpayers fail to remit the full amount of GST, it can lead to GST litigation.

These are some common catalysts for GST litigation. GST litigation involves legal proceedings, legal representation before adjudicating authorities, and legal filing, among other steps.

Pre-Litigation Notices:

Various pre-litigation notices can be issued to taxpayers to address potential tax disputes.

Scrutiny of Returns under Section 61:

The proper officer has the authority to scrutinize tax returns submitted by taxpayers. If any discrepancies are found, the proper officer can demand an explanation from the taxpayer.

Notice for Conducting Audit under Section 65:

The commissioner can audit a specific taxpayer if there are suspicions of non-compliance. A notice should be sent at least fifteen days before passing an order to conduct the audit.

Special Audit by Chartered Accountant under Section 66:

With the commissioner’s permission, an assistant commissioner can appoint a chartered accountant to verify a taxpayer’s tax return and other relevant documents. The chartered accountant’s report helps determine whether the taxpayer has violated any provisions of GST.

Summons under Section 70:

Under this act, the proper officer can issue summons to any person whose attendance is deemed necessary for producing important evidence or conducting an inquiry.


This article provides an overview of GST litigation. The process of GST litigation is extensive, involving the contributions of GST authorities and appellate tribunals. Ensuring proper compliance with GST regulations and filing accurate tax returns is crucial to avoid GST litigation.

G.Durghasree B.A.B.L (Hons)

G Durghasree B.A.B.L (Hons) is a registered trademark attorney with extensive experience as an Advocate for a period of 8 years. She possesses expertise in trademark law, including trademark filing and trademark hearings. Additionally, she is skilled in contract drafting and reviewing, providing legal advice and opinions, particularly in the areas of Company Law, Insolvency and Bankruptcy Code (IBC), and Goods and Service Tax Law (GST). Her experience encompasses both litigation and non-litigation aspects of these laws.