How to avoid GST-related litigation
The expectation is that tax litigation will reduce significantly under GST. This is because the credit chain is seamless and the tax will ultimately be borne by the final consumer. However, India is implementing a fairly complex GST regime and if businesses are not careful, there can be adverse litigation consequences. Registration is the key to the proposed GST regime. So decisions regarding taking registration and updating the registration with new offices and establishments is key to avoiding unnecessary litigation in GST.
The other area that is likely see high rate of litigation is supplies made by unregistered persons. Under the GST regime, registered persons are required to pay tax on reverse charge on supplies received from unregistered persons. In most companies there are many supplies received where expenses are booked but with no corresponding tax invoices. Tax officers are likely to review these expenses during audits.
One more complex area of litigation where company personnel require guidance is the place of supply of goods and services. In many cases, place of supply provisions are unintuitive and can lead to wrong payment of tax. Classification is also another potential area of disputes.
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