A client receives a GST show cause notice proposing a large demand for wrongly claimed input tax credit. How do you handle it?

What the interviewer wants to hear

• Reviews the notice, period, allegations, sections and limitation
• Gathers facts and documents from the client
• Analyses the legal position and case law
• Drafts a structured reply and requests a personal hearing
• Considers options like paying undisputed amounts and planning for appeal

Model answer

I first read the notice carefully: the period, the exact allegations, the sections invoked, the amount of tax, interest and penalty, the due date for reply and whether it was issued within the time limit, and whether it alleges fraud or suppression, which changes the time limits and penalties. Then I collect facts from the client: invoices, proof of receipt of goods or services, payment to suppliers, GSTR-2B data and the suppliers’ filing status. I separate items where the client is clearly right from items with real exposure. For the strong items, I build arguments based on the law, circulars and decided cases, supported by documents. For weak items, I may advise paying the tax with interest to reduce penalty. I draft a clear, point-wise reply, ask for a personal hearing, and attend it with a short written summary. If an adverse order still follows, I plan an appeal within the deadline.

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