GST UPDATE

Dated :

To,

The VATO/Officer, Ward No.

Delhi.

Dear Sir/Madam,

IN THE MATTER OF M/S . GSTIN –

Reg : REPLY AGAINST DRC – 01 DT. .

Penalty under Section 122

That the tax payer wants to submit as under :-

1.That the taxpayer had received Notice in Form DRC-01 for non-compliance of E-Invoice in FY 2023-24.

2.That the taxpayer sells only nil-rated or wholly exempted goods/services, they do not have any GST liability on their sales. This means they don't need to charge GST to their customers and don't need to remit any GST to the government. 

3.That The taxpayer hereby giving submission that during the above-mentioned period, the tax payer had sold only exempted good(s)/Nil Rated Goods and therefore, compliance of e-invoicing was not applicable.

4.That The taxpayer wants to submit that during the above-mentioned period, the tax payer had sold only exempted good(s) and therefore, applicability of e-invoicing was not applicable on him.

5.That The taxpayer further clarifies that with reference to the Instruction F. No. CBIC- 20006/15/2023-GST Dated 18th October, 2023 that:

?First, “Nudged and Advised” to be issued,

?Then, Inform the taxpayer about applicability of e-invoicing,

?Then, Emphasis on taxpayers having AATO crossed Rs. 50 Crores.

The relevant and important para are reproduced as below:

“Accordingly, the field formations are advised to take the following action on the list provided by GSTN:

i.The tax authorities may find the reasons for non-issuance of B2B and export invoices through e-invoicing by such taxpayers. If it is reported by the taxpayers that they have not exceeded the prescribed threshold limit under sub-rule (4) of Rule 48 of the CGST Rules or are exempted from issuance of e-invoice under relevant legal provisions/notifications, they may be advised to declare their exempted category on the functionality on the portal by using the functionality recently provided by GSTN. If the reasons are not in accordance with the provisions of the Rules and the relevant notifications, the taxpayers may be nudged and advised to immediately start issuing invoices through e-invoicing.

ii.The tax authorities may also inform the taxpayers (who have exceeded annual aggregate turnover and are mandatorily required to issue invoices through e-invoicing) about the provisions of sub-rule (5) of Rule 48 of CGST Rules providing that any invoice issued by such taxpayers, in the manner other than the manner prescribed under sub-rule (4) of Rule 48 of the CGST Rules, i.e. other than e-invoicing, shall not be treated as valid invoice. They may also be informed that they will be liable to penalty under Clause (c) of sub-section (3) of Section 122 of CGST Act, in case of their failure to issue invoices through e-invoicing system.

iii.In case of continuous non-compliance of the provisions of Rule 48(4) of CGST Rules by the taxpayers, who are otherwise required to issue invoices for B2B and export transactions through e-invoicing, appropriate penal action, as mentioned in sub-para (ii) above, may be initiated under the CGST Act and Rules made thereunder. To begin with, emphasis should be laid on the taxpayers who have exceeded aggregate turnover of more than Rupees Fifty Crore, as sufficient time has elapsed since e-invoicing has been made mandatory for these taxpayers from April, 2021.”

Hence, It has been clarifies under instructions that proper opportunity of being heard must be provided before levying penalty under CGST Act and more emphasis on levying of penalty to taxpayers having AATO > 50 Crores.

Further, there are no penalties prescribed under the IGST Act. However, the penalty under section 122 of CGST/DGST Act, 2017 may be levied at the time of any offence committed by the tax payer by making any taxable supplies without E-invoicing. But in the present case, the tax payer had made only exempted supplies or NIL rated supply (Sale register along with Sample Invoices are attached with this reply).

Further, tax payer wants to clarifies and prayer that he has not committed any breach of law or comply the provision of E-Invoice due to tax payer does not qualify the requirements for e- invoicing as per Rule 48 of CGST Rules of the CGST /DGST Act.

Hence, looking into the facts and circumstances of the case, the taxpayer request your goodself to quash the notice and delete the penalty of Rs 75,000/- on account of non-issuance of e-invoice which is not applicable on the tax payer and drop the proceedings.

For M/s 

Auth Sign/POA

Ph.No.

Encl:

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