Notices, summons, and orders are the key instruments used by tax authorities in India’s Goods and Services Tax (GST) regime to secure compliance, monitor taxpayer behaviour, and enforce the provisions of the CGST Act, 2017, and related regulations. Such legal communications are normally sent during audits, investigations, assessments, or when discrepancies are found in returns or transactions.
A notice of GST is a reminder to the taxpayer about a default or seeking clarification, whereas a summons is a stricter command to attend or produce documents as per Section 70 of the CGST Act.
On the other hand, an order is the ultimate decision or command from a GST officer made after an examination or procedural examination.
Each of the above actions has legal implications, requiring timely and proper action to avoid penalties, interest, or legal recourse. It is critical that all registered taxpayers under the GST regime understand the nature and intent of such communications.
What is a GST Summon?
A GST summons is a formal legal notice sent by the Goods and Services Tax (GST) officials according to Section 70 of the CGST Act, 2017. It is used in investigations, audits, or inquiries when the concerned official feels it necessary to call someone to produce evidence, information, or documents related to a case.
A GST summons has the same force of law as a summons issued by a court under the Civil Procedure Code and is required to be complied with in full.
The reason for which a GST summons is served is to assist officers in collecting information about suspected GST evasion, fraud, incorrect claims of input tax credit (ITC), or other types of non-compliance.
Types of GST Summons
- Summon for Personal Appearance: The person is expected to present themselves personally before the GST officer on a specified date and time to furnish an oath.
- Document Production Summons: The documents requested could be invoices, books of accounts, e-way bills, bank statements, and returns bearing relevance to the query.
- Summon to Third Parties: This is directed to parties other than the taxpayer (e.g., suppliers, transporters, or clients) who might hold information about the current investigation.
- Combined Summon: A notice that requires both personal attendance and document production.
Failure to comply with a GST summons can attract GST law penalties and would even attract prosecution under relevant sections of the Indian Penal Code (IPC). Therefore, it is essential to reply on time and correctly.
Reasons for Receiving a GST Summons
Receiving a GST summons indicates that your GST transactions or compliance is being questioned and must be addressed with care and according to the law.
- Suspected Tax Evasion: If the taxpayer is suspected to under-declare sales, over-declare expenses, or not pay GST.
- Mismatch in GST Returns: Disharmony between GSTR-1, GSTR-3B, GSTR-9, or GSTR-2A/2B may lead to an inquiry and a summons.
- Incorrect Input Tax Credit (ITC) Claim: ITC claimed on fake invoices, ineligible goods/services, or non-existent suppliers.
- Fake Invoicing or Fake Companies: Issuance or receipt of fake invoices for goods/services not delivered.
- Willful non-filing or delay in filing of returns, including GSTR-1, GSTR-3B, and annual returns.
- Suspicious transactions may comprise high cash deposits, unusual records of exports/imports, or turnover that is not in proportion with financial records.
- Third Party Verification: In case your name appears in the investigation of another taxpayer, you can be called as a witness.
- Input from Other Agencies: Data obtained from banks, Customs, and the Income Tax Department.
- GST Audit or Anti-evasion Probe: You could be called during an anti-evasion investigation or audit by state GST authorities or DGGI.
Steps to Respond to a GST Summon
Obeying a GST summons is a solemn legal requirement that demands solemn, correct, and professional consideration. A GST summons is usually issued by the GST Department (Intelligence, Anti-evasion, or Audit branches) under Section 70 of the CGST Act, 2017, and mandates an individual to attend, submit documents, or provide information during an investigation or inquiry.
To respond to a GST notice in a timely manner, in all honesty, and at a professional level is of utmost importance. To take professional advice, to be absolutely transparent, and to have proper documentation is always advised. Fulfilling these terms not only safeguards you legally but also facilitates easy disposal of the notice. Always approach such notices with seriousness and reply accordingly with the documents needed and legal advice.
1. Understand the Nature and Purpose of the Summon
A GST summons is also sometimes used to obtain information or documents regarding GST compliance. It calls a person to appear in order to produce evidence or comments. It is employed to investigate suspected evasion, fraud, or irregularity.
Always check:
- The name and title of the issuing officer.
- Date, time, and place of appearance.
- Documents or records are being asked for.
- Whether addressed to the taxable person or his authorised representative.
2. Consult an Experienced GST Practitioner or Lawyer
Immediately seek advice from a Chartered Accountant (CA), Cost Accountant, or tax consultant. Learn the history of your company and why the summons has been issued. Request help in preparing the necessary documents and drafting a proper response.
3. Obtain and Prepare Required Documents
According to the summons, get:
- GST registration certificate
- Copies of GSTR-1, GSTR-3B, GSTR-9, etc.
- Sales and purchase invoices
- E-way bills
- Stock registers
- Bank statements
- Books of accounts and ledgers
- Contracts or agreements (if any)
Make sure that documents are:
- Correctly organised and indexed
- Self-attested
- Carried both in original and duplicate (if physical look is necessary)
4. Draft a Formal Written Response
To reply, please mention the GST officer, reference number, and date of summons. Describe your compliance, state your willingness to appear, and enclose a list of documents. Mention any other documents you are forwarding, along with your signature, GSTIN, and contact information.
5. Appear Personally (if necessary)
To obey a summons that requires you to appear personally, be there on time. Carry a copy of the summons and your reply. Show courtesy and cooperation. Providing false information can result in prosecution under Section 193 and Section 228 of the IPC and Section 70(2) of the CGST Act. If permitted, you can request to be accompanied by a legal representative.
6. Submit Documents and Obtain Acknowledgement
Send your response and documents in person, by a representative, or by registered post/email where permitted. Obtain and keep a record of submission acknowledgement. Copy all documents and correspondence submitted.
7. Record of Statement (if necessary)
You might be asked to make your statement on oath (Section 70). Tell the truth and simply. Don’t make assumptions or unconfirmed statements, as statements can be used as evidence in the future. Ask for a copy of your recorded statement if necessary.
8. Follow-up and Compliance
Answer any additional questions or clarifications in writing. Join any other hearing in case you are summoned once more. Submit any pending returns or correct any mistakes identified during the investigation (if any) after discussion.
9. Legal Remedy in Case of Coercion or Harassment
If the summons appears to be unjustified, vague, or oppressive, you may:
- Lodge a written complaint with the superior authority of the officer.
- Petition the High Court through a writ petition in case of an abuse of authority or a violation of natural justice principles.
Consequences of Non-Compliance
Non-compliance with a GST summons issued under Section 70 of the Central Goods and Services Tax (CGST) Act, 2017, can result in serious legal and financial consequences. A GST summons is a binding order by a GST officer for the appearance, production of information, or production of documents during an investigation, audit, or inquiry. Failing to respond accordingly amounts to a violation of the law.
Under Section 122(3)(d) of the CGST Act, a maximum fine of ₹25,000 is leviable for non-compliance without due reason. In circumstances of furnishing wrong facts or deliberately suppressing documents, the person can be prosecuted under Section 70(2), along with Sections 193 and 228 of the Indian Penal Code (IPC), for giving false evidence and obstructing justice. These offences can lead to imprisonment, fines, or both.
Default can result in freezing of bank accounts, suspension or cancellation of GST registration, search, seizure, or further inquiry, and also a negative impact on corporate image and Input Tax Credit (ITC) eligibility.
In order to avoid legal repercussions, it is essential to take a GST summons very seriously and reply with utmost cooperation, prompt attendance, and accurate documentation.
Conclusion
Compliance with a GST summons is a legal obligation that should be handled seriously, correctly, and professionally. Compliance at the right time, submission of proper information, and personal attendance (if necessary) all add to openness and co-operation with the authorities. Engaging professional legal or tax services facilitates proper management of the situation and safeguards your rights during the investigation. Failure can lead to penalties, prosecution, and damage to corporate reputation. Consequently, maintaining proper records and responding promptly to GST notifications not only ensures legal compliance but also establishes confidence with the regulatory agencies and minimises the risk of long-term legal consequences.
Related Services
