Every operating business in India carries two parallel tax obligations that run on
different clocks: direct tax under the Income-tax Act, 1961 — computed annually but
increasingly enforced through withholding (TDS) on a monthly basis — and indirect tax under
the CGST Act, 2017 and its state counterparts, which run on a monthly or quarterly return
cycle from the day GST registration is granted.
The way this usually goes wrong isn't a missed payment — it's a missed reconciliation.
GSTR-3B is filed on time, but never checked against GSTR-2B for input tax credit mismatches.
TDS is deducted, but deposited a few days late, which under Section 40(a)(ia) can disallow
the entire underlying expense, not just draw interest. Individually small compliance gaps
compound into an assessment that costs far more than the original tax would have.
Qalve's approach treats the compliance calendar and the tax position as the same problem —
registrations, returns, and TDS obligations tracked against the entity's actual transactions,
so a scrutiny notice or a GST mismatch notice is answered from a reconciled position, not
reconstructed under deadline pressure.
For companies with related-party cross-border transactions, this also covers transfer
pricing documentation — coordinated with
Cross-Border Trade & Advisory
where FEMA reporting and tax reporting intersect.
§ Who this serves
Client archetypes
Growing businesses
Crossing the GST registration threshold for the first time and setting up the filing rhythm correctly.
Companies with a compliance gap
Facing TDS defaults or ITC mismatches that need reconciling before they escalate.
Businesses under scrutiny
That have received a tax or GST notice and need a properly documented response.
Foreign subsidiaries
Needing transfer pricing documentation for related-party cross-border transactions.
What is the GST registration turnover threshold in India?
As a general rule, ₹40 lakh in aggregate turnover for suppliers of goods and ₹20 lakh for suppliers of services (lower thresholds apply in special category states), though several categories of business must register regardless of turnover — for example, anyone making inter-state taxable supplies or selling through an e-commerce operator. The exact threshold that applies depends on the state and the nature of supply.
What happens if TDS is not deducted or deposited on time?
Under Section 40(a)(ia) of the Income-tax Act, 1961, the underlying expense can be disallowed for the payer, in addition to interest under Section 201(1A) and a penalty for the default itself. It's a compounding cost — the disallowance alone often exceeds what the correctly deducted TDS would have been.
What's the difference between GSTR-1 and GSTR-3B?
GSTR-1 reports the details of outward supplies (sales) made during the period, while GSTR-3B is a summary return declaring total tax liability and input tax credit claimed, along with the actual tax payment. Mismatches between the two — or between GSTR-3B and the auto-populated GSTR-2B — are one of the most common triggers for a GST department notice.
Is a tax audit mandatory for every business?
No — it depends on turnover thresholds under Section 44AB of the Income-tax Act, 1961, which differ for a business versus a profession, and shift further for taxpayers opting into presumptive taxation schemes. Crossing the threshold without arranging the audit on time itself draws a penalty, separate from any tax ultimately assessed as due.
What should I do if I receive an income tax scrutiny notice?
First, verify it against the income tax e-filing portal — notices are increasingly digital and faceless, and fraudulent notices do circulate. Then respond within the stated timeline with the documents actually requested; an unanswered scrutiny notice under Section 143(2) tends to escalate faster and on worse terms than one that's engaged with properly from the first response.
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