Ahmedabad: In a first-of-its-kind drive, the state GST department is using Udyam MSME data to identify firms that could be liable for GST registration. Businesses whose MSME records point to turnover above the registration threshold are being issued notices to submit extensive financial documents, including income tax returns, invoices, bank statements and turnover details.The notices have triggered anxiety among small firms that claim their actual turnover is below the applicable limit or that they deal mainly in exempt or non-taxable activities.A senior state GST official said the department has started leveraging Udyam data to identify entities that may have crossed mandatory registration limits but are not registered under GST. “We have used Udyam MSME data to shortlist cases and verify whether businesses have crossed the threshold for compulsory GST registration. Where the indicators suggest they may be liable, we have sought supporting records,” the official said.The notices seek multiple documents, including income tax returns, balance sheets, sales and turnover statements, Udyam registration certificate, sales and purchase invoices, bank statements and a breakup of taxable, exempt and non-taxable turnover.Chartered accountants said the exercise is also sweeping in businesses that may not actually be liable. Many MSMEs, they said, report estimated or projected turnover on the Udyam portal at the time of registration, but later remain well below the GST threshold. Others receive notices despite being in exempt segments, such as the sale of land, which is outside the ambit of GST, like plots or wholesale unbranded grains.Karim Lakhani, a chartered accountant, said businesses should treat the notices as a compliance verification rather than an automatic determination of tax liability. “The department is pulling data from Udyam portal and businesses must ensure their turnover and registration status are accurate. If the activity is exempt or non-taxable, they should respond with clarification and documents. If they have crossed the threshold, they should apply for registration without delay,” he said.Professionals pointed out that the Goods and Services Tax Network and the MSME ministry’s Udyam platform are now fully data-integrated, allowing tax authorities to run automated analytics and match PAN-based information across systems.CAs said notices can be triggered when Udyam turnover declarations exceed the registration thresholds — Rs 40 lakh for goods and Rs 20 lakh for services in most states — even as the PAN shows no GST registration.Notices may also be sent to already registered taxpayers if Udyam turnover or investment figures appear significantly higher than the turnover reported in GSTR-1 and GSTR-3B for the same year.
