Welcome to another Friday, chief!

In today’s edition — The GST deadline rush intensifies with several companies hit by hefty demands from the tax department, which may lead to court disputes as enterprises challenge the notices. Also, fresh changes in tax rules now require individuals to report detailed household expenses, sparking concerns over increased scrutiny.

Taxman’s V-Day Gift: GST Notices

February was the month of love, some deadlines, a sharp decline in stock markets, and if you're a business, it was also the month a flurry of love arrows from tax men in the form of GST notices.

As tax demand deadlines drew closer, authorities worked overtime to send demand orders to all and sundry—insurance companies, cement makers, financial institutions, and also your go-to travel website. 

For example, in February alone, LIC got five GST notices, J&K Bank was slapped with a whopping ₹16,261 crore demand, and EaseMyTrip was directed to explain a minor ₹17.35-lakh discrepancy. A clear message from the tax department was: your misstep does not have to be too big in order to get an invitation to the GST audit party.

Just look at some of the demands:

• LIC: Five separate tax demands, the biggest exceeding ₹400 crore, for wrongful input-tax credit claims.

• J&K Bank: A ₹16,261-crore demand for not charging GST on internal interest allocations.

• Shree Cement: A ₹12.52-crore tax demand for non-payment of GST on outward supplies.

• EaseMyTrip: A ₹17.35-lakh penalty for mismatched GST returns.

• Vodafone Idea: A ₹16.73-crore GST demand order from West Bengal authorities. The telco has already made it clear: they’re not paying without a fight.

• Bajaj Auto: A ₹138-crore tax demand over GST classification of auto parts. Authorities claim all Bajaj spares should be taxed at 28%, while the company insists they fall under an 18% category.

Hard to say whether tax men are really chasing defaulters or it is only an exercise in bureaucratic efficiency. But at this rate, even local kirana shops may want to check their mailboxes.

Why This Sudden GST Frenzy?

The simple answer is: deadlines. GST rules stipulate that demand orders must be sent within three years of an annual return’s due date (or five years for fraud cases). 

This means that February 28, 2025, was the last date for demand orders related to FY21 non-fraud cases, and February 5 was the last date for FY18 fraud cases. 

Usually, show-cause notices are sent 3-6 months in advance, which explains the deluge of notices in November-December 2024. The February frenzy was simply the final batch before time ran out.

More Legal Battles

The GST authorities have played their hand. Now, businesses would be required to respond.

J&K Bank and Vodafone Idea, for instance, have already announced their plans to challenge the tax demands. Their argument is that tax laws have been misclassified and misinterpreted. Likewise, legal teams of various companies are busy preparing a suitable response to the notice.

According to tax experts, with more compliance deadlines approaching, this trend of last-minute tax notices is unlikely to slow down because some of these cases go back to the chaotic early years of GST when compliance was complicated, policy changes were rather frequent, and companies were struggling to figure out the new tax.

Years later, the tax department is just trying to make sure every rupee due comes to its coffers. At this point, businesses just need to stay ahead of the game and be more diligent in book-keeping.

Until next time—stay compliant, stay prepared, and, if possible, stay off the taxman’s radar!

What’s your pancake-to-Panini ratio?

If you believe tax season is just about filing returns, you better review that belief because the income-tax department just tweaked a few rules of the game.

The taxmen are asking some tax assesses to give a detailed breakup of their household expenses—right down to what they spend on cooking oil, atta, and even haircuts.

That’s right. Your pancake-to-panini ratio is now the official business of taxmen. 

But keep in mind that you will get this unusual notice only when your returns show you have a high income but you withdraw very little money for day-to-day expenses.

In such a case, the taxman assumes there’s more to your accounting than meets the eye. In other words, they suspect you have some undeclared cash flow.

And what happens if you fail to or choose not to provide details?

The department will estimate your annual household spending at ₹1 crore—because, clearly, you’re either hoarding cash, or living on fresh air and some cool vibes.

For those who thought tax evasion was all about Swiss bank accounts and shell companies, bad news: even your monthly atta bill is now under scrutiny. 

So, better start saving those grocery receipts—your next audit might just come down to dal vs. basmati rice.

27,000,000

That’s 27 million. That's the number of women monitoring their credit scores. According to a report by NITI Aayog released this week, more Indian women are seeking credit and actively tracking their credit scores, signalling growing financial awareness. As of December 2024, 27 million women were monitoring their credit, a 42% increase from the previous year. Their share in the total self-monitoring base grew to 19.43% from 17.89% in 2023, with non-metro areas outpacing metro regions in credit self-monitoring growth at 48% versus 30%.

— The Income Tax Department may soon have the legal right to investigate your social media profiles, emails, bank accounts, online investments and trading accounts. If tax authorities suspect you have evaded taxes or have any undeclared assets, cash, gold, or other valuables, they can investigate your accounts, says an ET report. This new provision will come into effect under the proposed Income Tax Bill and will make the process of tax investigations in line with the digital age, the report said.

— India’s high-net-worth individual (HNWI) population, comprising those with assets exceeding $10 million, grew by six per cent in 2024, reaching 85,698, according to global property consultant Knight Frank. The latest edition of ‘The Wealth Report 2025,’ released this week, highlights India’s expanding wealth landscape, with the HNWI population projected to reach 93,753 by 2028. The billionaire population has also surged, with 191 billionaires in 2024, up from 165 the previous year. Notably, 26 individuals joined the billionaire ranks in 2024, compared to just seven in 2019.

— HDFC Securities has announced the appointment of Anand Mathur as Chief Financial Officer. Mathur brings a wealth of experience from his tenure at HDFC Bank and Citibank India, where he has gained insights into financial management and strategy. He is a Chartered Accountant with over 20 years of extensive experience in various financial domains. 

— Markets regulator Sebi has issued necessary clarifications on nomination facilities in the securities market in a bid to make the process of transmission and nomination easier for demat accounts and mutual fund (MF) folios. In a circular, Sebi said if one or more joint account holders pass away, the assets will be transferred to the surviving holder(s) without the need for additional KYC unless it was requested earlier and not provided. The surviving holder(s) can update their contact details and add or change their nominee(s) at any time.

ICYMI: No Proof, No GST Cancellation

Last week we brought you the story of a small company fighting the tax department over arbitrary cancellation of its GST registration. It wasn’t at all going well for the company till it decided to approach the court. And that’s when the magic happened.

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