A customer speaks to an employee at a mobile phone store in New Delhi. (Photographer: Prashanth Vishwanathan/Bloomberg)

GST: Promoters, Directors To Get SMS Alerts For Discrepancies In Returns, Non-Payment

The Goods and Services Tax Network has developed a system with which text messages are being sent to promoters, directors and proprietors of companies automatically in case of tax defaults, filing of returns or mismatch in input-tax credit claims by business entities, its Chief Executive Prakash Kumar said.

He said once the GST system generates “red flag” alerts, the information is also shared with the revenue department to alert taxmen to take appropriate steps. “Wherever there’s a difference between GSTR-3B and GSTR-1, GSTR-3B and E-Way bill, reminder SMSes now go not only to the authorised signatories, but also to the promoters of businesses and directors on board,” Kumar told PTI in an interview.

GST system automatically sends these SMSes three days after last date of filing of returns.
Prakash Kumar, CEO, GST Network

Also read: Two Years Of GST – Dissecting Disputes

The five system-generated “red flags” include default in payment of tax and non-filing of GSTR-3B, and mismatch in the input tax credit claimed by businesses vis-à-vis the returns filed by the supplier. Discrepancy in GSTR-3B (summary returns) and GSTR-1 (supplies return), and generating e-way bill but not filing returns, are also the parameters based on which alerts are generated.

This information we are also showing to the taxpayer on their dashboard, Kumar said. “We started sending SMSes to promoters because maybe the promoters do not know. It may be the accounts guy or CFO who checks the dashboard. So we send it to promoters,” he said.

The system sends SMS alerts to promoters and directors of businesses and helps them to rectify the mistakes as many times the promoters are not aware whether the returns are being filed correctly by the officer concerned, he said. Kumar said for big businesses which have not filed GSTR-3B by the 20th of a month, reminders are sent to promoters and directors on the 23rd of that month.

Again we check whether they have filed by 10th of next month. This helps us a lot, because if SMS goes to promoters, it has impact.
Prakash Kumar, CEO, GST Network

The SMSes are sent every month and an every quarter for regular and composition taxpayers respectively. Separately, GST Network, the company which handles the technology backbone for the indirect tax regime, is also sharing information with the tax department about businesses which have not filed returns for two consecutive months.

With effect from August 22, the facility for generating e-way bill will be blocked for businesses which don’t file GSTR-3B for two consecutive months. Dubbed as an anti-evasion step, transporters and businesses are required to generate e-way bill for transporting goods more than Rs 50,000. Currently there are 1.22 crore businesses registered under GST, of which 17.5 lakh are composition taxpayers.

Bloomberg Quint

Add BloombergQuint App to Home screen.