Gst Notices Flood Punjab’s Msme Sector: 50,000 Asmt-10 Notices Raise Alarm Over Compliance Burden And Alleged Harassment
Sep30,2026
| Jagrati Lahar Bureau | Ludhiana
GST Notices Flood Punjab’s MSME Sector: 50,000 ASMT-10 Notices Raise Alarm
Over Compliance Burden and Alleged Harassment
Ludhiana: All Industries & Trade Forum has strongly objected to the large-scale issuance of GST
ASMT-10 scrutiny notices to MSMEs in Punjab, stating that the exercise has created an additional
burden of compliance, uncertainty and repeated interaction with tax authorities at a time when the
MSME sector is already facing severe economic pressure.
According to information compiled by the ALL INDUSTRIES & TRADE FORUM, around 50,000
ASMT-10 notices have been issued to MSMEs in Punjab. The Forum has demanded that the
Punjab Government and GST authorities immediately review these notices and withdraw cases
where there is no substantive discrepancy or where the notices have merely been generated or
forwarded without proper examination of the taxpayer's records.
President Baadish Jindal & Convinor Narinder Bhamra said that an ASMT-10 notice is legally
meant to communicate a discrepancy identified during scrutiny of a registered person's return.
Under the GST Rules, the taxpayer is entitled to submit an explanation in FORM GST ASMT-11, and
where the explanation is found acceptable, the officer is required to communicate acceptance
through FORM GST ASMT-12.
“The purpose of GST scrutiny should be to identify genuine tax discrepancies, not to create a
climate of fear among small businesses. If tens of thousands of notices are being issued
without proper examination of the underlying transactions, it becomes an enormous
compliance burden for MSMEs,” said Jindal.
Notices should not become a tool of harassment
The Forum alleged that in a number of cases brought to its attention, notices appear to be based on
routine or system-generated discrepancies and are subsequently forwarded to MSMEs without
adequate consideration of the actual business circumstances.
The World MSME Forum said that where notices are factually incorrect, repetitive, based on
already reconciled information or unsupported by a substantive discrepancy, the taxpayer
should not be forced into prolonged proceedings merely to establish what should already be clear
from the GST records.
Jindal further said that such a system can increase the dependence of small businesses on
intermediaries and professional assistance, thereby increasing their compliance costs.
“Whenever a small entrepreneur receives a notice involving complicated GST reconciliation,
he is forced to spend money on accountants, consultants and repeated visits or
communications. This is particularly difficult for small manufacturing units that are already
struggling with working-capital shortages. The Government must ensure that the scrutiny
mechanism does not become a source of harassment or create opportunities for corruption,”
he said.
GST REFUNDS DELAYED WHILE MSMEs ARE ASKED TO ANSWER NOTICES
The Forum also questioned the priority being given to scrutiny notices when many MSMEs are
waiting for legitimate GST refunds.
According to the Forum, some MSMEs have been waiting for GST refunds for periods extending
to six months, creating serious working-capital problems for businesses.
GST refund claims are processed under the prescribed refund mechanism, including applications
through FORM GST RFD-01.
Jindal said, “When the Government expects every MSME to comply with GST requirements
within the prescribed time, the Government machinery must also discharge its
responsibility of processing legitimate refunds within the statutory framework. An MSME
cannot be expected to finance the Government by keeping its legitimate refund blocked for
months.”
The Forum pointed to earlier audit findings concerning Punjab's GST refund administration, which
had identified delays in provisional refunds and cases where provisional refunds had not been
sanctioned despite no recorded violation of the relevant rules.
ALL INDUSTRIES & TRADE FORUM demands immediate action
The World MSME Forum has requested the Punjab Government and GST authorities to:
1. Immediately conduct a review of all ASMT-10 notices issued to MSMEs in Punjab.
2. Withdraw/close notices that are baseless, repetitive, factually incorrect or generated
from discrepancies that have already been reconciled.
3. Ensure that no notice is issued or forwarded without proper examination of the
available GST data and taxpayer records.
4. Establish a time-bound mechanism for disposal of ASMT-10 notices, particularly where
the taxpayer has already submitted a complete explanation.
5. Ensure that genuine GST refund claims are processed and released without unnecessary
delay.
6. Create a transparent mechanism through which an MSME can report alleged harassment,
unnecessary repeated notices or demands for unofficial payments, with protection for
the complainant.
7. Undertake an assessment of the man-hours and financial cost imposed on MSMEs by
large-scale GST scrutiny, and simplify the process wherever possible.
“Industry needs liquidity, not additional harassment”
Jindal said Punjab's manufacturing sector is already struggling with weak demand, increasing
operating costs, competition and shortage of working capital.
“At a time when Punjab's MSMEs need liquidity, investment and policy support, thousands of
entrepreneurs are being pushed into additional compliance work. The Government should
be facilitating business, not increasing the administrative burden on small enterprises.”
The ALL INDUSTRIES & TRADE FORUM has therefore urged the Punjab Government to
immediately intervene and review the reported 50,000 ASMT-10 notices, identify notices
lacking a genuine substantive basis, and provide relief to affected MSMEs.
“We are not against legitimate GST scrutiny. Genuine tax evasion must be investigated and
legitimate tax revenue must be protected. Our objection is to indiscriminate or inadequately
examined notices that place an unnecessary burden on compliant MSMEs. The GST system
must operate on the principle of trust, transparency and accountability on both sides —
taxpayer as well as Government.”
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