GST Show Cause Notice of Rs. 1.87 crore received over FY23 ITC mismatch
Company received a Show Cause Notice dated September 30, 2026 from the Assistant Commissioner of Central Tax, Gachibowli Division (Hyderabad).
- Tax Demanded
- 1,70,51,787
- Penalty Amount
- Rs. 17,05,178
- Total SCN Amount
- 1,87,56,965
- Notice Date
- September 30, 2026
- Issue
- Difference between ITC reported in GSTR-3B and ITC reflected in GSTR-2A for FY 2022-23
What happened
Dreamfolks Services Limited has informed the exchanges that it received a Show Cause Notice (SCN) under Section 73(1) of the CGST Act from the Office of the Assistant Commissioner of Central Tax, Gachibowli Division, Hyderabad. The notice is dated September 30, 2026 and was received on September 30, 2026.
Amounts involved
- Tax: 1,70,51,787
- Penalty: Rs. 17,05,178
- Total: 1,87,56,965
- Break-up: IGST tax 6,743 with penalty 674; CGST tax 85,22,522 with penalty 8,52,252; SGST tax 85,22,522 with penalty 8,52,252
The alleged issue
The SCN pertains to the difference between the input tax credit (ITC) reported in FORM GSTR-3B and the ITC reflected in FORM GSTR-2A for the Financial Year 2022-23. In simple terms, the credit the company claimed in its monthly GST return did not match the credit visible from its suppliers' updates for that year.
Company's position
The company states it does not presently envisage any immediate material impact on its financials, operations or other activities from this matter, and is in the process of submitting an appropriate reply to the SCN within the prescribed timeline.
How to read this
A show cause notice is a preliminary stage — the authority asks the company to explain before any demand is confirmed. The outcome depends on the reply and the authority's subsequent order. The amount at stake, including penalty, is 1,87,56,965.
More numbers
- Tax demanded in SCN1,70,51,787
- PenaltyRs. 17,05,178
- Total tax plus penalty1,87,56,965
- IGST tax6,743
- IGST penalty674
- CGST tax85,22,522
- CGST penalty8,52,252
- SGST tax85,22,522
- SGST penalty8,52,252
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