Responding to a GST Audit & Demand in Gurugram — An NCR Case Note

This article is for general information only and does not constitute legal advice.

Background: When a routine audit becomes a demand

A mid-size auto-components supplier based near Gurugram received a notice for a GST audit. The company supplied both within Haryana and to Delhi/UP buyers, used multiple warehouses, and claimed input tax credit (ITC) on raw materials and services (freight, tooling, subcontracting). The initial department query flagged three areas:

1. ITC mismatch between GSTR-3B and GSTR-2A/2B for a six-month period,
2. Place-of-supply doubts for a set of job-work transactions routed via a Noida vendor, and
3. E-way bill and delivery-challan gaps for high-value dispatches during a festive surge.

Management feared a substantial tax + interest + penalty demand. They needed a GST lawyer in Gurugram familiar with cross-border supplies in NCR who could also coordinate with accounts teams and vendors in Delhi/Noida without disrupting operations.

Legal risks & complications spotted early

From an informational standpoint, the matter raised typical risks that many NCR businesses face:

• Document integrity: Gaps in e-way bills or delivery challans can trigger adverse inferences; reconstruction after the event is difficult without consistent ERP logs.
• Vendor compliance dependency: ITC eligibility can hinge on a vendor’s proper tax payment and return filing—even when the recipient has paid consideration and holds invoices.
• Place-of-supply classification: Job-work and cross-dock scenarios can blur whether the supply is intra-State or inter-State, affecting IGST/CGST-SGST treatment and invoicing flow.
• Procedural timelines: Missing the response window for a show-cause notice (SCN) or personal hearing can crystallize demands that are otherwise arguable.

Companies often ask whether to contest immediately or attempt resolution through representation and clarifications first. In NCR, records are spread across Delhi, Noida, and Gurugram, so collation is a practical challenge—one reason many seek a GST advocate in Delhi or a GST law firm in Noida that can coordinate across locations.

How counsel typically structures the response (process overview)

An informational process many practitioners follow in such cases looks like this:

1) Notice & data-gap mapping

Create a notice-to-records matrix: each query maps to ledger entries, purchase registers, vendor GSTR snapshots, e-way bill logs, and contracts/SOWs. This identifies gaps that need vendor re-confirmation or internal affidavits.

2) Vendor-side reconciliation

Issue structured queries to vendors showing mismatches (invoice no., date, taxable value, tax, upload status). Where the vendor has erred (e.g., delayed filing), obtain corrective steps (amendment/next-period adjustment proof, tax payment challans). This step is time-sensitive.

3) Substantive legal position on place-of-supply

For job-work transactions, outline the contractual flow (who owns the goods at each step, where processing occurs, who bears risk) and align it with place-of-supply rules. Where appropriate, include industry circulars/advance rulings (if relevant and persuasive) to show why IGST/CGST-SGST was chosen.

4) Evidence spine for movement of goods

Compile transporters’ LR/GR, GPS pings or gate-logs (if available), warehouse in/out registers, stock transfer memos, and e-invoices. A clean chronology often neutralizes assumptions made from isolated e-way bill gaps.

5) Drafting the reply & hearing preparation

The reply addresses each para of the notice, attaches the reconciliation packs, and explains remediation (if any) already undertaken. For the personal hearing, prepare a short issue-wise brief so the adjudicating authority can follow the records easily.

6) Considering ADR or appellate options

If a demand still issues, evaluate appeal on merits (classification, limitation, proportionality of penalty) and—where statute permits—consider pre-deposit and stay to protect cash-flows. Where feasible, litigation & ADR in Gurugram or Noida (limited to statutory frameworks) can sometimes narrow disputes to a few core issues.

Case progression in our scenario (informational)

In the Gurugram supplier’s matter:

• ITC mismatch: 70% of the mismatch arose from three vendors who had delayed GSTR-1 filing; challans and subsequent return data showed tax payment. Documentation and vendor affidavits formed the basis for relief on that portion.
• Place-of-supply: Contracts clarified that title passed post-processing in Noida, with movement billed to the end buyer ex-Noida; explanatory notes supported the IGST choice for specific lots, while a few invoices were voluntarily corrected prospectively.
• E-way bill gaps: Transporter gate-in stamps and ERP movement logs filled most missing links; two dispatches were conceded as documentation lapses, and a proportional penalty was argued based on absence of revenue loss.

Outcome (illustrative and informational): Following representation, the adjudicating authority recorded the reconciliations, accepted vendor-corrected filings for substantial relief, noted prospective compliance steps, and reduced exposure relative to the initial computation. The business adopted SOPs to align documentation across Gurugram–Delhi–Noida.

Notes for readers: your facts, timelines, and documents will differ. Professional advice is essential for any notice, SCN, or hearing.

Practical takeaways for NCR taxpayers

• Keep a live reconciliation between 3B vs 2B, with vendor health checks.
• Contract clarity on title transfer and risk during job-work reduces PoS disputes.
• Transport evidence (including gate logs/GPS) can save you when e-way bills are imperfect.
• Calendar the clock: reply/hearing dates, pre-deposit windows, and appeal limits.
• When matters escalate beyond representation, engage experienced counsel—whether you look for a GST lawyer in Gurugram, a GST advocate in Delhi, or coordinated support via a GST law firm in Noida—so that filings, hearings, and evidence are consistent across jurisdictions.

If you’re dealing with GST audits, SCNs, or appeals in Delhi NCR and need structured guidance, you can contact Tygar Law for a consultation. (Informational query only; this post is not legal advice.

Declaration: This blog is intended for informational purposes only and contains general content and information so available on public Platforms. There is no intention to solicitate any kind of work through this medium. We should also like to clarify that Tygar Law Corporate is not responsible for any reliance so placed on the information so provided, herein readers are advised to take appropriate legal consultation as per there case and Jurisdiction for the advice pertaining to their specific situation.

Tygar Law – Corporate Legal Services
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