Government of Andhra Pradesh

Commercial Taxes Department

Office of the Asst. Commissioner (ST)

Suryabagh circle, Visakhapatnam 1
2-7/3, Plot No.21, Rajivnagar,
Old Dairy Farm Post, Visakhapatnam-40

Date:20.11.2024

Draft Discrepancy Note submitted to Draft Audit Review Committee

Visakhapatnam – I in respect of Quality care india limited with GSTIN:
37AABCA7624C2ZZ

Audit circle name Suryabagh Circle

Number of audit teams 1
Audit team head 1 (Dy AC)
Number of audit team members 2 (GSTO-1 & AEO-1 )
Number of units audited 1
Audit period 2021-22 & 2022-23
Number of paras raised 2
Revenue detected Rs.

Reference ID:ZD370224021475M

GSTIN: 37AABCA7624C2ZZ
Name: Quality Care India Limited
Address: Plot No 3, Sy No 58, Near Health City
Chinagadili, Arilova, Visakhapatnam 530040
Mai ID: [email protected]
Mobile No: 9618555807

Sub: APGST Act 2017- Quality care india limited -GSTN: 37AABCA7624C2ZZ – ADT 01 issued-28-02-2024

Verified data available in BO portal & audit record verified–Certain variations noticed–clarification requested
along with record- Reply filed with record-Reply and record verified-Discrepancies noticed-Draft audit paras
prepared for approval- submitted –regarding

@@@@

M/s Quality Care India Limited (herein referred as taxpayer) is

registered under GST Act, 2017 with GSTIN 37AABCA7624C2ZZ and allotted to
the State Jurisdiction, and on the rolls of The Asst. Commissioner (ST), Bheemili
Circle, Visakhapatnam -1 Division, Visakhapatnam. The taxpayer’s
registered office is located at Plot No 3, Sy No 58, Near Health City,
Chinagadili, Arilova, Visakhapatnam 530040. Additional place of
business located at D.NO 10-50-11/5, A S RAJA COMPLEX, T.S. NO
1031 OF WALTAIR WARD BLOCK NO 45, Ram Nagar, Visakhapatnam,
Andhra Pradesh-530002.

The Commissioner (ST), Vijayawada has authorized the undersigned vide

Ref’s: XXxXXXXXX dated xx.xx.xx24 for the tax period 2020-21 to 2022-23 for
conducting GST Audit under Section 65 of GST ACT, 2017.The audit Officer has
issued notice in GST ADT-01 under Rule 101(2) of APGST Rules read with Section
65(3) of the said Act vide. Ref’s. No.ZD370224021403X Dt.28.02.2024 for
verification of the records.

In response to the notice, the taxpayer submitted financial statements,

Purchase register, Consolidated turnover details, income tax return copies, Trail
balance statements,. expenses register, bank statements, directors report, bills
of entry details, sample purchase/ sale invoices and other relevant data for
verification.

On verification, it is revealed that the taxpayer is engaged in the business

of providing healthcare services and related activities under the name and Style
of “Quality Care India Limited”.

A. Nature of Business:

The taxpayer engaged in both taxable and exempted business activities.

Specifically:

 Exempted Supplies: The inpatient services provided by your

establishment are exempted supply from GST.
 Taxable Supplies: The following taxable supplies are being provided:
o Sale of pharmacy to outpatients or over-the-counter pharmacy sales
o Sale of scrap
o Rental income
o Miscellaneous income

Further, it is noticed that, cosmetic surgeries are not being provided by the
taxpayer.

B. Place of Business:

Taxpayer is registered in the following three states:

 Telangana (Hyderabad)
 Andhra Pradesh (Vishakhapatnam)
 Odisha (Bhubaneshwar)

A. Procedure adopted for availament of Input tax credit:

a. The Taxpayer is engaged in the business of provision of health care
services to patients which is exempted from GST as per Sl.No.74 of the
 Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017
under CGST Act, 2017.
b. In addition to the exempted activity, the Taxpayer is engaged in sale of
pharmaceuticals through pharmacy outlets, which is a taxable activity
under GST. Further, certain activities like clinical research income,
canteen sale etc., are also taxable under GST Law.
c. The pharmacy purchases made by the taxpayer were exempted (i.e.,
treatment of Inpatient services) as well as taxable (i.e., Sale of
Pharmacy in outlets).
d. There was common procurement of pharmaceuticals, until May 2020,
wherein, The input tax credit (ITC) was reversed in proportion to the
exempted turnover.
e. From May 2020 onwards, the taxpayer started procuring goods
separately for the pharmacy outlet and maintaining a separate register
of ITC.
f. The taxpayer not claiming ITC on goods purchased for exempt
supplies.
g. Input tax credit in respect of Capital goods has been reversed, in
compliance with Rule-42 provisions of CGST Rules, 2017.

Verification of compliance level: The return compliance of the taxpayer got

verified and noticed that they filed the GSTR-3B, GSTR-1, GSTR-9 & GSTR-9C
returns within the due date.

Para 1 : ITC accrued under reverse charge in GSTR-2A Vs Tax

liability reported under reverse charge in GSTR-3B:-

On verification in the Audit, ITC accrued in GSTR-2A does not

match the tax liability reported in GSTR-3B.

**Note: Interest computed till 21-11-2024

Hence, the taxpayer proposed to pay tax of Rs. 81,468/- (Rs.

40,734/- towards CGST and Rs. 40,734/- towards CGST) .

Para 2 : Comparison of turnover and tax as per E-waybill and

GSTR-3B:-

On verification of turnover and tax figures reported in the E-

waybill data with the turnover and tax declared in the GSTR-3B for
the 2020-21 tax period there was mismatch of IGST taxas under.
 e-Waybill GSTR-3B(3.1a+3.1b) Difference of Turnover
Tax Total CGS SGS Total Total
IGST IGST CGST SGST IGST CGST SGST
Period Turnover T T Tax Turnover Total Tax
20200 -
4 0 0 0 0 0 3829770 0 231479 231479 462957 3829770 0 -231479 -231479
20200 -
5 0 0 0 0 0 5811640 0 353539 353539 707078 5811640 0 -353539 -353539
20200 -
6 0 0 0 0 0 6664105 0 406866 406866 813732 6664105 0 -406866 -406866
20200 -
7 0 0 0 0 0 7374741 0 450697 450697 901394 7374741 0 -450697 -450697
20200 -
8 0 0 0 0 0 6484001 0 395797 395797 791594 6484001 0 -395797 -395797
20200 -
9 0 0 0 0 0 6917086 0 428011 428011 856021 6917086 0 -428011 -428011
20201 -
0 0 0 0 0 0 7039410 0 429603 429603 859206 7039410 0 -429603 -429603
20201 -
1 0 0 0 0 0 6426011 0 391670 391670 783340 6426011 0 -391670 -391670
20201 22833 22833 22833 -
2 1268500 0 0 0 0 8582226 0 445209 445209 1118749 7313726 0 -445209 -445209
20210 -
1 0 0 0 0 0 7176231 0 436562 436562 873125 7176231 0 -436562 -436562
20210 30378 30378 30378 -
2 1687712 8 0 0 8 8831310 8 435091 435091 1173971 7143598 0 -435091 -435091
20210 - 2288
3 127125 22883 0 0 22883 8280037 0 506744 506744 1013488 8152912 3 -506744 -506744
- -
55500 55500 53211 491126 491126 1035465 8033323 2288 - 491126
Total 3083337 1 0 0 1 83416568 8 9 9 6 1 3 4911269 9

Hence, the taxpayer proposed to pay tax of Rs. 22,883/- towards

IGST and interest computation as follows:

In view of the above findings basing on the records available, I herewith

submit the Draft Discrepancy Note for kind approval so as to submit the
same to RIMC, Visakhapatnam for further approval.

SD/-B.Sakuntala
Deputy Assistant
Commissioner(ST),
Suryabagh Circle,
Visakhapatnam 1 Division