Come the new year, multiple large companies have received gifts from the Goods and Services Tax (GST) department in the form of demand notices.
Among these, the Life Insurance Corporation of India (LIC) alone was slapped with notice for around ₹806 crore on January 1. The next day, Hindustan Unilever was sent a GST demand of ₹447.5 crore. Similarly, a series of notices to Asian Paints, Eicher Motors, ICICI Prudential, and Nestle India, with regards to pending GST dues and penalties for FY19 and FY20, have rattled corporate India.
Come the new year, multiple large companies have received gifts from the Goods and Services Tax (GST) department in the form of demand notices.
Among these, the Life Insurance Corporation of India (LIC) alone was slapped with notice for around ₹806 crore on January 1. The next day, Hindustan Unilever was sent a GST demand of ₹447.5 crore. Similarly, a series of notices to Asian Paints, Eicher Motors, ICICI Prudential, and Nestle India, with regards to pending GST dues and penalties for FY19 and FY20, have rattled corporate India.
Besides the corporates, the insurance industry has been handed a ₹5,500 crore bill, the gaming industry has also been on the receiving end of a staggering cumulative demand of ₹1.5 lakh crore, and the real estate industry's demands exceed ₹2,000 crore. As many as 33,000 GST notices have been issued by authorities for return discrepancies and short tax payments in FY18 and FY19.
Big Impact
These notices, while not directly affecting business operations, have cast shadows over mergers and acquisitions (M&As). Companies are recalibrating their strategies, ensuring they account for tax liabilities before finalizing deals and other transactions, as per an Economic Times report.
It added that multinational companies are grappling with challenges like the taxation of expatriate salaries by Indian units, prompting legal challenges and delays in business deals.
Also Read | GST authorities issue demand notices worth ₹1.45 lakh crore in December for FY18: Report
Companies are also lamenting the lack of clarity in tax applications, which causes them to spend time and resources to resolve multiple notices issued by various authorities, it said.
Why the sudden onslaught?
GST officials cite a surge in notices due to potential time limitations. Relaxations during the COVID-19 pandemic led to a backlog of tax demands, prompting authorities to issue notices to avoid time-related disputes.
Also, the technology-driven scrutiny flags discrepancies in returns, and triggers automated notices.
Further, a surge in late 2023 notices was attributed to a deadline for FY19, initially December 31, 2023, extended to March 31, 2024.
Also Read | 'GST evasion of over ₹44,000 crore detected'
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Published: 08 Jan 2024, 12:57 PM IST