GST Litigation? When a taxpayer files a GST return, there are several things that get converted to litigation later on which may be related to claiming ITC and GST refunds. In simple words, GST litigation includes all the litigation like carry forward of transitional credits from the previous indirect tax system, eligibility for the input tax credit on various goods/services and denial of refund claims, non or short payment of output tax liability. The taxpayers must be aware that they are prone to the risk of being audited by the tax authorities during which all their tax positions, payments and compliances would be verified. Further, the revenue department has the necessary infrastructure to conduct such audits in a seamless manner. Moreover, the litigation process and conducting of audits are governed by the GST Act and rules made thereunder. In case of defaults noticed during audits, penalties would be levied. Interest implications could also arise for non-payment or short payment of taxes. In a situation where the taxpayers do not agree with the outcome of audits or assessments, a fair appeal mechanism is in place. Such appeal mechanisms are independent and unbiased towards the parties.