Gujarat’s GST department has launched a first-of-its-kind compliance drive using Udyam MSME registration data to identify businesses that may need to register for GST but haven’t. Officials say they are cross-checking Udyam records against GST registration status. Where Udyam data suggests turnover above the threshold—₹40 lakh for goods and ₹20 lakh for services in most states—notices are being asked to submit detailed documents.
The notices request income tax returns, balance sheets, sales and turnover statements, Udyam certificates, invoices, bank statements, and a breakup of taxable, exempt and non-taxable turnover.
This has created anxiety among small firms, including those that say their real turnover is below the limit or that they deal in exempt or non-taxable activities such as sale of land or wholesale unbranded grains, which are outside GST.
Chartered accountants note that many MSMEs report estimated or projected turnover on the Udyam portal at the time of registration, but later operate below the GST threshold. They advise treating the notices as a compliance check, not an automatic tax demand.
The move is possible because the Goods and Services Tax Network and the MSME ministry’s Udyam platform are now fully data-integrated, allowing automated analytics and PAN-based matching across systems. Notices can also go to already registered taxpayers if Udyam figures look much higher than GSTR-1 and GSTR-3B filings for the same year.
Experts say businesses should verify their Udyam data, clarify exempt activities with documents, and if they have crossed the threshold, apply for GST registration without delay.
FAQs [Frequently Asked Questions]
Q1: Why are exempt businesses getting GST notices in Gujarat?
Because GST authorities are using Udyam MSME data to flag firms whose declared turnover looks above the registration limit, even if their actual activity is exempt or non-taxable under GST.
Q2: What documents are being asked for in these notices?
Notices seek ITRs, balance sheets, turnover statements, Udyam certificate, sales and purchase invoices, bank statements, and a breakup of taxable, exempt and non-taxable turnover.
Q3: What should a business do if it receives such a notice?
Treat it as a compliance check: verify Udyam data, submit clarifications and proof if activity is exempt or turnover is below threshold, or register for GST if the limit is actually crossed.