Paramount Syntex contests Rs 43.58 lakh FY22 GST notice

Paramount Syntex Limited is contesting a Rs 43.58 lakh Goods and Services Tax, or GST, allegation for financial year 2021-22, saying its import input-tax credit and E-Way Bill differences are reconciled. The September 2025 notice also proposes an equal penalty, taking stated tax and penalty to Rs 87.15 lakh, while an adjudication order remains pending.

What does the Paramount Syntex GST notice allege?

The Paramount Syntex GST notice alleges two discrepancies amounting to Rs 43.58 lakh for April 2021 through March 2022. The Assistant Commissioner, Central GST Division, Ludhiana East issued the show-cause notice in Form GST DRC-01 on September 30, 2025 under Section 74 of the Central Goods and Services Tax Act, 2017.

The first allegation is Rs 24.65 lakh of excess integrated GST, or IGST, input tax credit, or ITC. ITC is credit for tax paid on eligible inputs or imports that can be set off against GST liability. The department compared credit reported in GSTR-3B, the monthly summary return, with GSTR-2A and GSTR-2B, portal-generated records of inward supplies and eligible credit.

The second allegation is Rs 18.93 lakh of short-paid central GST, or CGST, and Punjab state GST, or SGST. It comprises Rs 9.46 lakh each of CGST and SGST, based on a comparison between E-Way Bill data and GSTR-3B Tables 3.1(a) and 3.1(b), where taxable outward supplies and tax liability are reported.

Why does the Paramount Syntex GST notice state Rs 87.15 lakh?

The Paramount Syntex GST notice states Rs 87.15 lakh because the department proposed a penalty equal to the Rs 43.58 lakh disputed tax. The DRC-01 seeks recovery of the alleged tax with interest under Section 50 and an equivalent penalty under Section 74, although the disclosure does not specify a separate interest or late-fee amount.

Section 74 was invoked with the extended limitation period under Section 74(1), corresponding Punjab GST provisions and Section 20 of the Integrated Goods and Services Tax Act, 2017. The notice also cites Sections 122(1)(ii), 122(1)(xvii) and 122(2)(b), alleging wilful suppression, misstatement and intent to evade tax.

The DRC-01 followed a scrutiny notice in Form GST ASMT-10 dated July 24, 2025, issued under Section 61 of the CGST Act and Rule 99 of the CGST Rules. Paramount Syntex filed Form GST ASMT-11 on August 6, 2025 seeking more time for invoice-level reconciliations and third-party verification; the disclosure records extensions until August 25 and then September 12, 2025.

How does Paramount Syntex explain the IGST credit allegation?

Paramount Syntex says the Rs 24.65 lakh IGST mismatch is not excess or ineligible credit because it relates to import IGST paid at customs but not fully reflected on the GST portal. Its stated submissions included Bills of Entry, import summaries, portal screenshots and a reconciliation covering 27 import transactions in FY 2021-22.

The company said IGST paid and claimed on imports was Rs 3.28 crore, while IGST on imports reflected in GSTR-2A was Rs 3.38 crore. It attributed about Rs 20.43 lakh of the apparent difference to Bills of Entry that did not appear on the portal despite IGST and customs duty having been paid.

The department's calculation instead recorded Rs 3.28 crore of ITC in GSTR-3B against Rs 3.03 crore auto-drafted in GSTR-2B, producing the Rs 24.65 lakh difference. Paramount Syntex's position therefore depends on the officer accepting the import documents as evidence that customs-paid IGST remained eligible despite portal non-reflection.

How does Paramount Syntex explain the E-Way Bill difference?

Paramount Syntex says the Rs 18.93 lakh E-Way Bill allegation does not show short payment of output tax because the E-Way Bill records included non-supply movements. The preceding ASMT-10 scrutiny notice compared Rs 9.56 crore of E-Way Bill tax with Rs 9.38 crore of liability reported in GSTR-3B Tables 3.1(a) and 3.1(b), producing an initial Rs 17.93 lakh difference.

The company said goods moved under delivery challans between its factory at Village Mangarh, Kohara, Ludhiana and its additional warehouse at Lakhowal Road, Kohara, Ludhiana. It maintains that these inter-location movements did not constitute outward supplies and should not create GST liability in GSTR-3B.

Paramount Syntex also cited purchase returns, circular or typographical errors, and credit notes for rate differences without movement of goods in its January 21, 2026 reply. It said it submitted GSTR-1, GSTR-3B, GSTR-9, GSTR-9C, GSTR-2A, comparative reconciliation charts, sample delivery challans and E-Way Bills to support its request to drop the proceedings.

What is the current status of the FY22 GST proceedings?

The FY22 GST proceedings are pending for an order by the tax officer, according to the stated status in the disclosure. Paramount Syntex reported DRC-06 replies dated November 25 and December 6, 2025, and a January 21, 2026 show-cause notice reply requesting closure of the matter and a personal hearing.

The chronology also contains a procedural inconsistency. A second reminder dated August 4, 2026 records that no reply had been filed and no personal hearing attended, directing Paramount Syntex to reply and appear, while the disclosed status says “reply furnished, pending for order by tax officer.”

No adjudication outcome, confirmed tax demand or payment is disclosed for the September 2025 DRC-01. The pending order will address whether the Bills of Entry, import reconciliations, delivery challans and return comparisons substantiate the company's position on both alleged discrepancies.

Conclusion

The FY22 matter concerns two distinct reconciliation questions: Rs 24.65 lakh of alleged excess import-related IGST credit and Rs 18.93 lakh of alleged short payment derived from E-Way Bill and GSTR-3B comparisons. The proposed Rs 87.15 lakh comprises disputed tax and an equal penalty, while Paramount Syntex denies excess credit, short payment and intent to evade tax.

The next disclosed development to watch is the tax officer's order following Paramount Syntex's January 21, 2026 reply and request for a personal hearing. That order will determine whether the Section 74 proceedings are dropped or result in recovery of tax, interest and penalty.